Weakness persist in markets despite better than expected IIP numbers

Following a negative start, the Indian equity markets continued trading weak in the late morning session on Friday, amid severe selling pressure. The market sentiments were dampened with the disappointing start of the fourth quarter earnings session. Moreover, IT bellwether Infosys tumbled 18%, following the disappointing numbers for the January - March quarter. The software major reported a 3% year-on-year surge in net profit at Rs 2394 crore, but its revenues for the quarter turned out to be lower than what was expected. 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, which failed to improve the market sentiments. In currency markets, Indian rupee appreciated against dollar amid continued selling of the US currency by exporters. On the sectoral front, IT stocks were the major laggards following Infosys number. Realty and capital goods were also trading weak. However, FMCG stocks held gains amidst the mayhem in Dalal Street.

On the global front, most of the Asian shares retreated on Friday after recent gains, as signs of tensions in the Korean peninsula dented the investors’ sentiments. Nikkei remained lower by about a percent as the market took a breather after a recent run of gains to an almost five-year high. Back home, the market breadth was favoring negative trend; there were 696 shares on the gaining side against 1,119 shares on the losing side while 103 shares remain unchanged.

The BSE Sensex is currently trading at 18,279.68, down by 262.52 points or 1.42% after trading in a range of 18,337.91 and 18,193.18. There were 15 stocks advancing against 14 declines and one remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23% and Small cap index was down by 0.51%.

The top gaining sectoral indices on the BSE were, FMCG up by 1.78%, Oil & Gas up by 0.73%, PSU up by 0.46%, Power up by 0.38%, and Bankex up by 0.31% while, IT down by 9.84%, Teck down by 7.94%, Realty down by 0.49%, Consumer Durables down by 0.39% and Capital Goods down by 0.33% were the top losers on the BSE.

The top gainers on the Sensex were ITC up by 2.66%, Hindustan Unilever up by 1.38%, BHEL up by 1.29%, Hindalco up by 1.17%, and ONGC up by 1.13%.

On the flip side, Infosys was down by 18.37%, Wipro was down by 4.80%, TCS was down by 2.03%, Mahindra & Mahindra was down by 0.97% and Coal India was down by 0.69% were the top losers on the Sensex.

Meanwhile, Prime Minister Manmohan Singh, during his visit to Germany, has said that Government's resolve to boost economic growth remains strong and it continues to take tough decisions on policy issues. While, addressing an event, he said that Indian economy has slowed down mainly due to the prevailing global economic slowdown and the Government has considered several measures to revive the engines of economy’s growth.

Pitching for investments from Germany and other countries, Manmohan Singh said that India is always open and welcoming to foreign investment. The Government has set a target of nearly one trillion dollars in infrastructure over the next five years and German and European companies could make good use of the opportunities and help accelerate the growth process in the country.   

Prime Minister said the Government has set a target of over 8 per cent annual growth for the Twelfth Five Year Plan (2012-2017). This is the rate of growth that India recorded over the past decade and they are confident that the country can return to the same growth path in the near future as the economic fundamentals are strong. The spirit of enterprise and innovation are thriving in India, which are creating a lot of opportunities for investments. He said that they are striving to make India more attractive to investors both at home and abroad.

Manmohan Singh added “In the recent months, we have introduced strong measures to achieve fiscal consolidation, strengthen macroeconomic stability and have taken steps to accelerate implementation of major infrastructure projects”. 

The CNX Nifty is currently trading at 5,533.90 down by 60.10 points or 1.07% after trading in a range of 5,544.50 and 5,494.90. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Asian Paints up by 2.84%, ITC up by 2.70%, BPCL up by 1.95%, Grasim up by 1.54% and BHEL up by 1.40%.

On the flip side, Infosys down by 18.32%, TCS down by 2.21%, HCL Tech down by 1.70%, M&M down by 0.97% and Coal India down by 0.97% were the major losers on the index.

Most Asian equity indices were trading in red; Shanghai Composite down 0.34%, Hang Seng down by 0.13%, KLSE Composite declined 0.38%, Nikkei 225 dropped 0.47%, KOSPI Composite slipped 1.31%, Taiwan Weighted was down by 0.46% and Straits Times was slumped 0.33%. On the flip side, Jakarta Composite increased 0.30%.