Indian equities add losses; Nifty drifts below 5,600 mark

Indian equity markets added losses to continue weak trade in late afternoon session on account of selling in frontline counters. The sentiments were on pessimistic note despite Finance Ministry stating that better tax realization and some savings on expenditure may help trim the fiscal deficit to around 5.1% of the GDP for 2012-13. Traders were seen selling in Realty, IT and TECK sector stock.  Meanwhile, Sugar stocks continue to witness demand on hopes that the government will remove a requirement that they sell a portion of their output to the government at reduced prices, while also easing some of the restrictions on the sector. In scrip specific development, Dr Reddy’s Laboratories was trading in green after the company launched Zoledronic acid injection in the US market following approval by the United States Food & Drug Administration. On the global front, the Asian markets were trading on a mixed note while the European markets were too trading mixed. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,600 and 18,600 levels respectively. The market breadth on BSE was negative in the ratio of 753:1781 while 111 scrips remain unchanged.

The BSE Sensex is currently trading at 18,578.34, down by 223.30 points or 1.19% after trading in a range of 18,733.62 and 18,524.25. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap index were down by 1.59% and 1.83% respectively.

There were no gainers on the BSE, while Realty down by 2.77%, IT down by 2.29%, TECK down by 2.25%, Bankex down by 1.66% and Consumer Durable down by 1.55% were the top losers on the BSE.

The top gainers on the Sensex were Coal India up by 2.79%, Dr Reddy’s Lab up by 2.24%, Hindustan Unilever up by 1.40%, ONGC up by 0.71% and Maruti Suzuki up by 0.51%.

On the flip side, Tata Steel was down by 3.49%, Jindal Steel down by 2.96%, Sterlite Industries down by 2.93%, Infosys down by 2.70% and TCS down by 2.22%, were the top losers on the Sensex.

Meanwhile, raising concerns over an alarming rise in grey market investments with thousands of crores being raised through illegal means, the capital market regulator - Securities and Exchange Board of India (SEBI) called for a single watchdog to regulate all entities collecting public money under various illegal means and also pointed out that these deposit-taking firms were taking advantage of the loopholes in existing laws.

Currently, co-operative banks and deposit-taking NBFCs are regulated by the Reserve Bank of India (RBI), while chit-funds are under the purview of the state governments. While addressing a seminar on investment outlook for 2013, capital market regulator Chief, U K Sinha, making a strong case for providing more power, said, the SEBI has recommended that it be granted with similar powers as given to the Competition Commission or income-tax.

By adding further, Sinha said when we pass an order and impose monetary penalty, the capacity to recover the penalty is limited as we have to follow a long process. Pursuant to which, the SEBI has also sent some recommendations for strengthening SEBI Act.

SEBI’s comments come at a time when it is fighting a long-drawn case against Sahara Group, which has been asked by the Supreme Court to refund over Rs 24,000 crore raised from over three crore investors through issuance of certain bonds without SEBI's approval. SEBI has been to facilitate the refund after ascertaining the genuineness of investors.

The market regulator, SEBI will also start investor awareness campaigns from next week on the consent mechanism. On opening more SEBI offices, Sinha said the regulator has already opened offices in 10 cities and plans are going on to open 6 more offices in smaller cities.

The CNX Nifty is currently trading at 5,594.75, down by 78.15 points or 1.38% after trading in a range of 5,644.45 and 5,578.55. There were 10 stocks advancing against 39 declines and one remains unchanged on the index.

The top gainers of the Nifty were Coal India up by 3.10%, Dr Reddy's Laboratories up by 2.02%, HUL up by 1.45%, ONGC up by 0.85% and Maruti Suzuki up by 0.73%.

On the flip side, UltraTech Cement down by 5.47%, JP Associate down by 5.20%, HCL Tech down by 4.36%, DLF down by 3.57% and Tata Steel down by 3.49% were the major losers on the index.

Markets in mainland China, Hong Kong and Taiwan remained shut for the trade. While, barring KLSE Composite up 0.11% and Nikkei 225 up 2.20%; Jakarta Composite declined 0.58%, Straits Times dipped 0.32% and KOSPI Composite was down by 1.20%.

The European markets were trading on a mixed note; France’s CAC 40 added 0.50%, Germany’s DAX jumped 0.24% and United Kingdom’s FTSE 100 edged lower 0.08%.