Benchmarks surrender additional ground; Nifty dips sub 5900 level

Surrendering some more ground, benchmark equity indices are trading in red terrain due to sustained selling pressure amidst mixed macro-economic reports. On one hand, higher January factory output data, did provide some solace to the investors by hinting the economy was on the path of the recovery, on the other, higher CPI data casted doubts about whether RBI would slash rates in its upcoming monetary policy review on March 19, thereby weighing down on the Banking index. With the bout of fresh selling pressure, Nifty now slipped below its crucial 5900 level, with Sensex already gyrating below the 19600 level.

Pressure also seems to be coming from the stocks of Consumer Durable, Realty and Metal counters, which witnessing bout of selling pressure and topped the BSE sectoral selling list. Defensive Fast Moving Consumer Goods counter, emerged as the sole gainer. Domestic markets, in absence of positive global cues, also are failing to find takers. Dragged by the new worries about China’s recovery and Europe’s sluggisness, Asian pacific shares were trading mostly weak since early deals. Back home, sugar stocks, bucking the trend were trading sweet on reports that the government is likely to consider a proposal on sugar decontrol this week. Stocks, like Bajaj Hindusthan, Dhampur Sugar Mills and Sakthi Sugars, had all scooped up gains in the range of 1.5-4% each. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1574:961, while 120 shares remained unchanged.

The BSE Sensex is currently trading at 19536.41, down by 109.80 points or 0.56% after trading in a range of 19697.84 and 19505.75. There were 8 stocks advancing against 22 declines on the index.

The broader indices too witnessed additional selling pressure; the BSE Mid cap and Small cap indices were trading lower by 0.79% and 0.55% respectively.

The top losing sectoral indices on the BSE were, Consumer Durables down by 2.04%, Realty down by 1.33%, Metal down by 1.27%, Bankex down by 1.25% and Power down by 1.16%, while FMCG up by 0.38% continued to remain the sole gainer on the BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.65%, Mahindra & Mahindra up by 0.62%, ITC up by 0.37%, Reliance Industries up by 0.27% and Tata Motors up by 0.18%

On the flip side, Tata Power down by 3.02%, HDFC Bank down by 2.36%, Strelite Industries and Bajaj Auto were down by 2.20% and Bajaj Auto down by 1.90% were the top losers on the Sensex.

Meanwhile, in a pleasant surprise, India's annual industrial output growth measured by index of industrial production (IIP) grew by 2.4% at 181.8 for the month of January 2013 against contraction of 0.6%, later revised to -0.5% in the previous month. The numbers were way above the street expectations of over 1% growth figure. The cumulative growth for the period April-December 2012-13 over the corresponding period of the previous year stood at 1%.

The three sectors constituting the index showed marked improvement as compared to the December figures. Manufacturing sector, which constitutes about 75.53 percent of industrial production, expanded by 2.7% from a year earlier and also higher than contraction of 0.7% in the previous month. Mining sector, which constitutes about 14.6 percent of industrial production, after witnessing massive contraction of 4.0% (y-o-y) in the previous month, yet again showed contraction, narrowed at 2.9% in January.

Meanwhile, electricity sector, showcasing growth rose to 6.4% from a year earlier and also higher against 5.2% in the previous month. Cumulative growth in the three sectors during April-January 2012-13 over the corresponding period of 2011-12 has been (-) 1.9%, 0.9% and 4.7% respectively.

However, Capital goods output, a key investment indicator, stood at -1.8% against -0.9% in December. Consumer goods grew by 2.8% against massive contraction of 4.2% in the previous month, driven by growth of Consumer durables and Consumer non-durables at -0.9% and 5.3% respectively.

Interestingly, output in the country's eight key infrastructure industries, also known as the core sector and accounting for almost 40% of factory production, grew an annual 3.9% in January, in yet another sign that the economy was improving.

The CNX Nifty is currently trading at 5,895.90, down by 46.45 points or 0.78% after trading in a range of 5,952.00 and 5,895.65. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 2.22%, ACC up by 1.99%, Hindustan Unilever up by 1.57%, Ambuja Cements up by 1.55% and Tata Motors up by 0.60%.

On the flip side, Cairn down by 2.99%, Tata Power down by 2.92%, Siemens down by 2.05%, Tata Steel down by 1.77% and Bajaj-Auto down by 1.76% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 1.08%, Hang Seng slipped 0.43%, KLSE Composite dipped by 0.08%, KOSPI Composite dropped 0.50%, Nikkei 225 down by 0.28% and Taiwan Weighted was down by 0.55%.

On the flip side, Straits Times was up by 0.53%.

Jakarta Composite remained shut for the trade today.