Benchmark continue weak trade

In the late morning session Indian benchmarks continue to trade in a narrow range one percent below their previous closing due to widespread losses in IT-sector shares after Infosys forecasted lower-than-expected sales for fiscal 2013-14. On the global front, Asian markets were exhibiting mixed trend in late morning. The Bank of Japan’s liquidity injections and Wall Street’s record-high close overnight continued to underpin investor confidence. However, the gains remain capped as signs of tensions in the Korean peninsula dented the investors’ sentiments.

Back home, snapping a five consecutive monthly rise, the annual rate of inflation based on the consumer prices index (CPI), eased in the month of March at 10.39%, thereby strengthening the case for rate cut in RBI’s upcoming monetary policy review. According to the data released, provisional annual inflation rate based on all India general CPI (Combined) for March 2013 on point to point basis stood at 10.39% as compared to 10.91% final inflation number for the previous month of February 2013. The corresponding provisional inflation rates for rural and urban areas for March 2013 are 10.33% and 10.38% respectively.

Meanwhile, India's annual industrial output growth measured by index of industrial production (IIP) grew by 0.6% for the month of February 2013, although lower than the growth figure of 2.4% registered in the previous month, higher than the street’s expectation of negative number. The three sectors that constitute the index, i.e., mining, manufacturing and electricity sectors for the month of February grew by -8.1%, 2.2% and -3.2% respectively

The traders were seen piling up positions in FMCG, Oil & Gas and Power, while selling was seen in IT, Teck and Consumer Durables sector. In scrip specific actions, Reliance Industries soared despite reports that natural gas output from its KG-D6 block hit an all-time low of 15.5 million standard cubic meters per day. Kotak Mahindra Bank surged after its board approved a proposal to issue 2 crore equity shares to Heliconia, an affiliate of Government of Singapore Investment Corporation, on a preferential basis. Heavy selling pressure remained in Infosys as the stock which saw the biggest fall since April 2003. It missed revenue growth at 1.4 percent Q-o-Q at $1,938 mn. EBIT margins disappointed, dipping 200 basis points Q-o-Q to a historic low of 23.55 percent vs 25.68 percent. Era Infra Engineering slumped despite on bagging a Rs.430 crore contract from NTPC. Sterlite Industries tumbled ahead of a hearing into the closure of its copper smelter in Tamil Nadu.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5,500 and 18,200 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 514: 814.

The BSE Sensex is currently trading at 18273.89, down by 268.31 points or 1.45% after trading in a range of 18337.91 and 18193.18. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.28% and Small cap index was down by 0.44%.

The top gaining sectoral indices on the BSE were, FMCG up by 1.55%, Oil & Gas up by 0.73%, Power up by 0.50%, Health Care up by 0.42%, and PSU up by 0.38% while, IT down by 9.99%, Teck down by 7.97%, Consumer Durables down by 0.63%, Realty down by 0.62% and Capital Goods down by 0.19%were the losers on the BSE.

The top gainers on the Sensex were ITC up by 2.33%, Hindustan Unilever up by 1.16%, BHEL up by 1.15%, Cipla up by 0.98%, and ONGC up by 0.91%.

On the flip side, Infosys was down by 18.30%, Wipro was down by 4.83%, TCS was down by 2.75%, Tata Motors was down by 1.01% and L&T was down by 0.43% were the top losers on the Sensex.

Meanwhile, The Parliamentary Committee on Commerce (PCC) has cautioned the government against early signing of India-EU, Free Trade Agreement (FTA) and urged it to wait for the committee's report before finalizing it. The committee’s members have expressed strong concerns over any move to sign the EU-India FTA without taking note of the Committee's views as it is studying the impact of the agreement after taking view of all stakeholders and is likely to present its report soon. 

On the other hand, with the European Union demanding more access to India’s insurance sector and a stricter intellectual property regime and India refusing to give such assurances, India-EU free trade pact looks far from the finish line. The agreement will help Indian companies expand in the EU, the country's biggest trading partner.

Further, Commerce and Industry Minister Anand Sharma is scheduled to meet EU trade commissioner Karl De Gucht in Brussels on April 15 amidst expectations that the two sides may be able to iron out their differences, finally clearing the way for the signing of the FTA. On the positive front, an investment protection pact will be included in the proposed India-EU free trade agreement and the two sides will try to resolve issues concerning duty cut in the automobile sector in the high-level meet in Brussels.

The two-way trade between India and EU increased to about $110 billion in 2011 from $ 83.37 billion in 2010. India has already implemented comprehensive FTAs with other countries such as Malaysia, South Korea and Japan.   

The CNX Nifty is currently trading at 5,530.05 down by 63.95 points or 1.14% after trading in a range of 5,544.50 and 5,494.90. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were Asian Paints up by 2.53%, ITC up by 2.42%, Lupin up by 2.11%, BPCL up by 1.91% and BHEL up by 1.31%.

On the flip side, Infosys down by 18.30%, TCS down by 2.86%, HCL Tech down by 1.99%, IndusInd Bank down by 1.65% and Tata Motors down by 1.13% were the major losers on the index.

Asian equity indices were trading in mixed trend; Shanghai Composite rose 0.47 points or 0.02% to 2,220.02, Hang Seng jumped 35.81 points or 0.16% to 22,137.08, Jakarta Composite increased 14.55 points or 0.30% to 4,938.82.

On the flip side, KLSE Composite declined 6.25 points or 0.37% to 1,700.79, Nikkei 225 dropped 88.36 points or 0.65% to 13,460.80, KOSPI Composite slipped 19.37 points or 0.99% to 1,930.43, Taiwan Weighted was down by 37.38points or 0.48% to 7,820.60 and Straits Times was slumped 1.31 points or 0.05% to 3,307.05.