Benchmarks trade lower in morning deals on sluggish global cues

Pressurized by sluggish global cues, Indian equity indices have made a lackluster start on Wednesday with Sensex and Nifty breaching their crucial 19,500 and 5,900 levels respectively. The US markets mostly made a soft closing overnight, though Dow made modest gains to end higher in nine out of the ten previous sessions while, all the Asian equity indices were trading in the negative terrain as some investors locked in profits from the markets’ recent rally. Japanese Nikkei also declined by over quarter a percent after yen edged slightly higher as investors weighed reports that Japan’s main opposition party will vote against one of the government’s nominations for deputy governor of the country’s central bank.

Back home, traders opted cautious approach awaiting WPI inflation numbers to be announced tomorrow, as it will be the deciding factor for the RBI to go for a rate cut. However, describing the 2.4 percent industrial growth in February as bottoming out of the downturn, government hopes economic indicators would look up in the coming months. Sentiments also got dented as shares of public sector oil marketing companies like BPCL, HPCL and IOC edged lower as US crude oil futures traded near the highest level in 2 weeks after an industry report showed crude stockpiles fell for the first time in a month in the US, the world’s biggest oil user.

On the sectoral front, fast moving consumer goods remained the lone gainers on the BSE sectoral index while, consumer durables, software and auto remained the top losers on the BSE sectoral space. The broader indices too were bleeding badly while, the market breadth on the BSE was negative; there were 768 shares on the gaining side against 1,167 shares on the losing side while 81 shares remain unchanged.

The BSE Sensex opened at 19,511.97; about 52 points lower compared to its previous closing of 19,564.92, and has touched a high and a low of 19,511.97 and 19,425.86 respectively.

The index is currently trading at 19,474.19, down by 90.73 points or 0.46%. There were 9 stocks advancing against 21 declines on the index.

The overall market breadth has made a weak start with 39.94% stocks advancing against 56.34% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices decline by 0.36% and 0.35% respectively. 

The top losing sectoral indices on the BSE were, IT  down by 0.93%, Consumer Durables down by 0.91%, Auto down by 0.81%, Teck down by 0.77% and Bankex down by 0.70%, while FMCG up by 0.46% was the sole gainer on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 1.10%, Wipro up by 0.99%, ITC up by 0.79%, Tata Power up by 0.51% and Hindustan Unilever up by 0.43%.

On the flip side, Hindalco Industries was down by 2011%, Infosys was down by 1.73%, Tata Motors was down by 1.59%, ICICI Bank was down by 1.55% and ONGC was down by 1.25% 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 opened at 5,884.80; about 29 points lower as compared to its previous closing of 5,914.10, and has touched a high and a low of 5,888.45 and 5,869.05 respectively.

The index is currently trading at 5,885.75, down by 28.35 points or 0.48%. There were 13 stocks advancing against 37 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Sun Pharmaceuticals up by 1.10%, Wipro up by 0.97%, ITC up by 0.79%, HCL Tech up by 0.69% and Power Grid up by 0.50%.

On the flip side, Hindalco down by 2.01%, Infosys down by 1.81%, Tata Motors down by 1.74%, ICICI Bank down by 1.57% and Gail down by 1.46%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite tumbled 26.41 points or 1.16% to 2,260.19, Hang Seng declined 174.14 points or 0.76% to 22,716.46, Jakarta Composite slipped 9.42 points or 0.19% to 4,844.90, KLSE Composite dropped 10.50 points or 0.63% to 1,646.04, Nikkei 225 dipped 40.29 points or 0.33% to 12,274.52, Straits Times contracted 21.16 points or 0.64% to 3,281.86, KOSPI Composite decreased 3.32 points or 0.17% to 1,990.02 and Taiwan Weighted was down by 15.20 points or 0.19% to 7,979.51.