Benchmarks continue weak trade; Metals, Capital Goods decline

Indian benchmarks have fallen about half a percent in the late morning session due to continued selling by funds and retail investors amid a weak trend in Asian region. Sentiments got dampened by a patchy global growth outlook and weak data from Europe, but losses were limited as robust US economic figures overshadowed the worries about automatic spending cuts hurting the US economy. On the global front, All the Asian equity indices, barring Japanese Nikkei, were trading lower after US lawmakers failed to come to a conclusion to avert the imposition of $85 billion in spending cuts that kicked in on Friday last week. Back home, the traders were seen piling up positions in IT, and TECk, while selling was seen in Metals, Capital Goods, and FMCG sectors. In scrip specific development, Shares of state-owned oil marking companies (OMC) are trading higher 1-2% in an otherwise weak market after these companies hiked petrol price by Rs 1.40 per litre. Metal Stocks like Sterlite Industries, SAIL, Hindalco, JSW Steel and Tata Steel declined as LMEX, a gauge of six metals traded on the London Metal Exchange, fell 1.35% on March 1, 2013.

In scrip specific actions, ITC dropped for the second day in a row after the government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14. Bajaj Auto and Hero MotoCorp tumbled after weak sales in February . Minerals and Metals Trading Corp plunged on reports that government is planning to offload its over 9% stake in trading giant through Offer for Sale (OFS).Meanwhile, the NSE Nifty and BSE Sensex were trading near their psychological 5650 and 18800 levels respectively.

The market breadth on BSE was showing negative trend with advances to declines in ratio of 584:1401.

The BSE Sensex is currently trading at 18800.09, down by 118.43 points or 0.63% after trading in a range of 18930.86 and 18760.41. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.15% and Small cap index was down by 1.43%.

The top gaining sectoral indices on the BSE were, IT up by 0.21% and TECk up by 0.13% while, Metal down by 1.94%, Capital Goods down by 1.59%, FMCG down by 1.58%, Power down by 1.51% and PSU down by 1.25% were top losers on the BSE.

The top gainers on the Sensex were Dr Reddys Lab up by 1.23%, TCS up by 0.30%, ICICI Bank up by 0.29% Wipro up by 0.26%, and Bharti Airtel up by 0.24%.

On the flip side, Jindal Steel was down by 2.73%, Sterlite Industries was down by 2.68%, Bajaj Auto was down by 2.38%, Hindalco Industries was down by 2.22% and L&T was down by 2.05% were the top losers on the Sensex.

Meanwhile, Finance Minister P. Chidambaram said, that the Government is now working on non-legislative areas and a number of non-legislative decisions covering customs, excise, service tax and insurance and banking to promote economic growth, will be announced in Parliament before the passage of the Finance Bill. The FY14 Budget is focused on the legislative areas and the broad agenda.

During a comprehensive post-budget interview, Chidambaram said that he was satisfied with what he had done in the budget with a view to restart the growth engine. On the absence of any 'big bang' announcements in the budget, he said that big bang interests is only the media, but people want small, critical steps that will restart the growth engine.

Regarding the economic recovery, finance minister said that manufacturing is the only way to accelerate the economic growth. In order to revive manufacturing, which is not doing well, the government in FY14 Budget proposed tax concession for investment of Rs 100 crore in plant and machinery. He added that manufactured goods export is the only way to enable foreign exchange and pay for our imports 

The CNX Nifty is currently trading at 5,674.60 down by 45.10 points or 0.79% after trading in a range of 5,712.00 and 5,663.60. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were BPCL up by 1.73%, Dr Reddys Lab up by 0.75%, ICICI Bank up by 0.30%, Tata Motors up by 0.21% and Bharti Airtel up by 0.19%.

On the flip side, Ambuja Cement down by 3.25%, ACC down by 2.88%, Jindal Steel down by 2.76%,   Bajaj-Auto down by 2.62% and Sesa Goa down by 2.53% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite tumbled 67.37 points or 2.86% to 2,292.14, Hang Seng crumbled 400.54 points or 1.75% to 22,479.68, Jakarta Composite declined 42.31 points or 0.88% to 4,769.31, KLSE Composite slipped 1.11points or 0.07% to 1,636.33, Straits Times dropped 22.68 points or 0.69% to 3,248.16, KOSPI Composite contracted 12.55 points or 0.62% to 2,014.52 and Taiwan Weighted was down by 113.14 points or 1.42% to 7,851.49.

On the flip side, Nikkei 225 was up by 9.20 points or 0.08% to 11,615.58.