Indian equities continue weak trade; IT, TECK drags

Indian equity markets continued its weak trade in the late afternoon session on account of selling in frontline counters and taking cues from European counterparts. Sentiments remain dampened on account of severe selling pressure in Information Technology stocks, after poor showing from IT bellwether, Infosys, on its weak FY14 revenue guidance and poor Q4 sales figures. Also better than expected macro-economic reports which highlighted some recovery in Indian economy too failed to cheer the market. Traders were seen piling some position in FMCG, Bankex and Oil & Gas sector stocks while selling was witnessed in IT, TECK and Capital Goods sector stock. In scrip specific development, Idea Cellular was trading in red after Delhi High Court today asked telecom companies Vodafone India and Idea Cellular not to add new customers for their 3G services in circles where they do not have licences to offer that service. On the global front, the Asian markets were trading in red barring Jakarta Composite while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,550 and 18,300 levels respectively. The market breadth on BSE was negative in the ratio of 903:1246 while 119 scrips remain unchanged.

The BSE Sensex is currently trading at 18,232.30, down by 309.90 points or 1.67% after trading in a range of 18,337.91 and 18,186.10. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in red; the BSE Mid cap index and Small cap indices were trading lower by 0.27% and 0.44% respectively.

The top gaining sectoral indices on the BSE were, FMCG up by 2.20%, Bankex up by 0.60%, Oil & Gas up by 0.41%, Power up by 0.30% and PSU up by 0.27% while, IT down by 10.86%, Teck down by 8.74%, Capital Goods down by 0.79%, Realty down by 0.65% and Auto down by 0.60% were the top losers on the BSE.

The top gainers on the Sensex were ITC up by 3.24%, Hindalco Industries up by 2.66%, Hindustan Unilever up by 1.35%, SBI up by 1.33%, Bajaj Auto up by 1.09%.

On the flip side, Infosys down by 20.56%, Wipro down by 5.43%, TCS down by 1.52%, Mahindra & Mahindra down by 1.41% and Tata Motors down by 1.31% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) is expected to initiate action against the three private banks named in the recent sting operation - HDFC Bank, ICICI Bank and Axis Bank, which exposed willingness of bank employees to be accomplices in money laundering. When asked if RBI has completed investigations on the web portal's exposes, the RBI deputy governor H R Khan said, scrutiny has been done and action is being taken both in respect of systemic level and at the individual banks.

Further, it is reported that the standard operating procedure of the regulator once it identifies a violation is to issue a show-cause notice. Senior executives of the concerned bank are given a hearing and subsequently RBI decides on the penalty. At systemic level, the RBI is expected to come out with new norms on the incentive and sales process followed by banks in distribution of third party products such as insurance and gold bars.

This will be the first major action by the central bank following the enactment of the Banking Regulation Amendment Act, which empowers RBI to impose higher penalties up to Rs 25 lakh per offence. Along with penalties, the central bank had also come out with new guidelines on derivatives to prevent similar situations in future. However, this is not the first time RBI is taking concerted action against banks for violations which were seen as somewhat systemic issues pertaining to a section of banks.

The CNX Nifty is currently trading at 5,522.10, down by 71.90 points or 1.29% after trading in a range of 5,544.50 and 5,494.90. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were ITC up by 3.03%, Asian Paints up by 2.97%, Hindalco up by 2.50%, Lupin up by 2.21% and BPCL up by 2.05%.

On the flip side, Infosys down by 20.67%, HCL Tech down by 1.92%, TCS down by 1.74%, L&T down by 1.57% and Tata Motors was down 1.49%, were the major losers on the index.

Most Asian equity indices were trading in red; Shanghai Composite down 0.58%, Hang Seng down by 0.06%, KLSE Composite declined 0.53%, Nikkei 225 dropped 0.47%, KOSPI Composite slipped 1.31%, Taiwan Weighted was down by 0.46% and Straits Times slumped 0.43%. On the flip side, Jakarta Composite increased 0.32%

The European markets were trading in red; France’s CAC 40 lost 0.51%, Germany’s DAX dropped 0.89% and United Kingdom’s FTSE 100 edged lower by 0.43%.