Benchmarks slip to intra-day low; relinquish most of the morning gains

Gradually losing steam, the benchmark equity indices have relinquished most of their gains on account of accentuated selling pressure following the release of 16 months low factory output figures. Languishing near day’s low, benchmark 30 share index, Sensex is trading below its psychological 18900 level, with 50 share index Nifty, too oscillating below the crucial 5700 mark. Investors apparently have turned their attention to beaten down second-line shares, with the midcap index trading over 1.5% gains. Meanwhile, on the global front, Asian shares dropped and commodities declined for a second day after a survey of sentiment among the Japan’s largest manufacturers missed estimates. Back home, however, benchmark equity indices managed to hold in green on account of some optimistic statements by the Finance Minister, Finance Minister P. Chidambaram, who believes the economy capable of absorbing $50 billion in foreign direct investment per year. Sectorally, Realty, Capital Goods and Health Care counters were in demand, while auto shares were in red on concerns of a continuous decline in monthly sales. Meanwhile, metal shares too witnessing profit-booking, was the top laggard. The overall market breadth on BSE is in the favour of advances which were outnumbering declines in the ratio of 1567:797, while 100 shares remained unchanged.

The BSE Sensex is currently trading at 18854.17, up by 18.40 points or 0.10% after trading in a range of 18959.48 and 18845.92. There were 14 stocks advancing against 16 declines on the index and one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.84% and 1.62% respectively.

The top gaining sectoral indices on the BSE were Realty up by 2.70%, Capital Goods up by 1.75%, Health Care up by 1.17%, Power up by 0.97% and Consumer Durables up by 0.57%, while Metal down by 1.20%, Auto down by 0.88% and Fast moving consumer goods down by 0.08% were the top losers on the BSE. 

The top gainers on the Sensex were BHEL up by 3.31%, Dr Reddys Lab up by 2.41%, L&T up by 2.10%, Cipla up by 2.04% and Infosys up by 1.66%.

On the flip side, Sterlite Industries down by 4.26%, Tata Motors down by 2.15%,  Jindal Steel down by 2.02%, Mahindra & Mahindra down by 1.35% and ONGC down by 1.27% were the top losers on the Sensex.

Meanwhile, to ensure that the agri-business firms do not misuse funds of National Cooperative Development Corporation (NCDC) in the clutch of producer companies, a Parliamentary panel has suggested the government for changes in NCDC amendment bill, which aims to treat producer companies at par with cooperative societies for availing financial help from the NCDC

As per the panel, ‘the NCDC Act 1962 and the rules and guidelines framed there under should be so modified as to ensure that the funds of NCDC do not land into the hands of undeserving because in that eventuality the very purpose of setting up of the corporation will be defeated’ panel recommended.

The panel also suggested to make provisions for protecting the interest of marginalized section as the formation of a producer company is a voluntary process and no law or mechanism exists at present to safeguard them from negative impact of companies, which are profit driven.

The panel committee has hit the government for an inordinate delay in bringing amendments to the NCDC Act 1962 saying that the proposed legislation to amend NCDC Act has been mooting for 10 years later in 2012. The concept of producer companies was formalized through an amendment in Companies Act, 1956 in 2002.

The NCDC advances loans and subsidies to state governments for financing cooperative societies and for employment of staff for implementing programmes of cooperative development. Corporate and agri-business firms use the NCDC funds for agri-business. Further, regarding the NCDC funding to non-farm sectors, the panel said ‘NCDC should channelize its energy and attention towards farm related portfolio, rather than frittering away their resources for services other than agriculture.’  The CNX Nifty is currently trading at 5,693.20, up by 10.65 points or 0.19% after trading in a range of 5,720.95 and 5,688.10. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were DLF up by 3.49%, BHEL up by 3.39%, Cairn India up by 3.03%, Ranbaxy up by 2.63% and Dr Reddy’s Lab up by 2.35%.

On the flip side, Sesa Goa down by 2.48%, Jindal Steel & Power down by 2.03%, Tata Motors down by 2.01%, IDFC down by 1.57% and M&M down by 1.31% were the major losers on the index.

Most of the Asian equity indices were trading in red; KLSE Composite slipped 0.24%, Nikkei 225 plunged by 2.12%, Jakarta Composite was down by 0.08%.

On the flip side, Straits Times rose 0.10%.

Stock market in Hong Kong, South Korea and Taiwan remained closed for the trade today.