Weak trade persists; Nifty below 5,900 mark

Indian equity markets continued its weak trade in the late afternoon session on account of selling in front line counters and taking cues from European counterparts. The sentiments on the street were on pessimistic mood after Morgan Stanley and HSBC each cut their India’s economic growth forecasts for 2013/14 to 6.0% from 6.2% to reflect lower-than-expected growth in the October-December quarter.  The market also took note of Prime Minister Manmohan Singh’s statement where he said that there were international as well as domestic factors responsible for the prevailing economic scenario, but expressed confidence that the economy would be back to robust growth in about three years. Traders were seen piling some position in FMCG and Realty sector while selling was witnessed in Auto, Consumer Durables and Bankex sector. In the scrip specific development, Suzlon Energy was trading in red after foreign research house HSBC rated the stock as `underweight'. Sun Pharmaceutical Industries was trading in green after the foreign research house CLSA upgraded the stock to `buy'. Power Grid Corporation of India was trading in green after Goldman Sachs upgraded the stock to ‘buy’ from ‘sell’, citing inexpensive valuations.

On the global front, the Asian markets were trading in red barring KOSPI Composite and Taiwan Weighted while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,900 and 19,500 levels respectively. The market breadth on BSE was negative in the ratio of 947:1753 while 140 scrips remain unchanged.

The BSE Sensex is currently trading at 19,459.78, down by 105.14 points or 0.54% after trading in a range of 19,511.97 and 19,418.60. There were 12 stocks advancing against 18 declines on the index.

The broader indices were too trading in red; the BSE Mid cap and Small cap indices were trading lower by 0.61% and 0.93% respectively.

The top losing sectoral indices on the BSE where, Auto down by 1.32%, Consumer Durables down by 1.28%, Bankex down by 1.11%, IT down by 0.99% and Teck down by 0.88% while FMCG up by 0.75% and Realty up by 0.38% were the only gainers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 1.00%, HUL up by 0.97%, Sterlite Industries up 0.96%, ITC up by 0.87% and RIL up by 0.59%.

On the flip side, Hindalco Industries down by 3.27%, ONGC down by 2.49%, Gail India down by 2.27%, Maruti Suzuki down by 2.18% and Jindal Steel down by 2.14% were the top losers on the Sensex.

Meanwhile, to capture inter-state trade data, considered as essential for the proposed Goods and Service Tax (GST) regime, the government is ready with a roadmap and will soon submit a report on creating such an interstate database to the Fourteenth Finance Commission. The tracking of trade flows between states, which has never been attempted before in the country, could improve the credibility of state-level GDP numbers and help in better planning for infrastructure projects on the basis of goods movement trends.

At present, states’ GDP at market prices figure do not contain proper inter-state trade data, which often renders to ineffective state-level fiscal policies as they are based on wrong numbers. This move by the government comes on the back of the Thirteenth Finance Commission stressing on the need to compile inter-state trade data, especially in the context of the proposed GST regime which requires such transactions to be 'zero rated.'

For creating an inter-state trade database, the Directorate General of Commercial Intelligence and Statistics (DGCIS), which compiles India's foreign trade data and the Central Statistics Office, have submitted recommendations after conducting a pilot project to track trade flows between four states - Tamil Nadu, Kerala, West Bengal and Sikkim. After which, the commerce ministry is expected to submit a report to the Fourteenth Finance Commission, stating that domestic trade figures of states could be released on an annual basis to start with.

According to DGCIS, data compilation on interstate trade for now is done through railways, river, air and sea. However, statistics of interstate movement of goods by road is not collected by any agency and has never been done before. About 60% of the total freight movement in the country takes place by road and this share is likely to increase as India's road networks are developed further. Thereby, the government has expressed the need for states to common reporting codes for commodities and to share primary trade data with the DGCIS.

The CNX Nifty is currently trading at 5,878.60, down by 35.50 points or 0.60% after trading in a range of 5,893.85 and 5,867.15. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Asian Paints up by 1.25%, HCL Technologies up by 1.13%, Sesa Goa up by 1.10%, ITC up by 1.02% and Sun Pharma up by 0.93%.

On the flip side, Hindalco Industries down by 2.97%, Gail India down by 2.58%, ONGC down by 2.49%, Jindal Steel down by 2.49% and Axis Bank down by 2.34%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 0.99%, Hang Seng tumbled 1.46%, Jakarta Composite slipped 0.65%, KLSE Composite dropped 0.85%, Nikkei 225 dipped 0.61% and Straits Times contracted 0.68%.

On the flip side, KOSPI Composite increased by 0.32% and Taiwan Weighted was up by 0.01%.

The European markets were trading in red; France’s CAC 40 lost 0.38%, Germany’s DAX descended 0.11% and United Kingdom’s FTSE 100 dropped by 0.53%.