Indian equity continues to trade weak; Realty, CG drag

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline counters and mirroring decline in Asian markets. The mood remained cautious despite C. Rangarajan, the top economic adviser stating that India’s worst economic slowdown in a decade has bottomed out and growth is expected to pick up to 6.4% in the current fiscal year.

However, traders were seen piling position in IT, TECK and Health Care stocks, while selling was witnessed in Realty, Capital Goods (CG) and Banking sector stock. The stock market will remain shut tomorrow on Wednesday April 24, 2013, on account of Mahavir Jayanti. In scrip specific development, UltraTech Cement was trading in red after a brokerage firm warned that the company is currently facing headwinds as demand is likely to remain weak in the near term, essentially on a weak industry environment affecting cement prices and volumes. Jet Airways’ was trading firm on reports that private equity player Blackstone has held preliminary talk with the airline’s frequent flier unit, JetPrivilege for buying a stake. Jaiprakash Associates was trading in green on reports that Ultratech Cement is in final talks to buy Jaypee’s two Gujarat plants for enterprise value of Rs 4,100 crore.

On the global front, all the Asian markets were trading in red, while the European markets were trading mixed.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,850 and 19,100 levels respectively. The market breadth on BSE was negative in the ratio of 939:1231, while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 19,079.08, down by 90.75 points or 0.47% after trading in a range of 19,210.26 and 19,042.08. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.63% and Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were, IT up by 0.48%, TECK up by 0.18% and Health Care up by 0.15%, while Realty down by 1.66%, Capital Goods down by 1.39%, Bankex down by 1.30%, Consumer Durables down by 1.14% and PSU down by 1.07% were the top losers on the BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.71%, Hero MotoCorp up by 1.62%, Dr. Reddy’s Lab up by 1.42%, Reliance Industries up 1.15% and Sun Pharma was trading up by 1.07%.

On the flip side, Jindal Steel down by 4.02%, ONGC down by 2.22%, Tata Motors down by 2.16%,  SBI down by 2.06%, and L&T down by 1.78% were the top losers on the Sensex.

Meanwhile, Commerce and Industry Minister Anand Sharma has said that the negotiations between India and the European Union (EU) for a free trade agreement have been intensified and the bilateral trade in goods and services and investment flows would be enhanced from the Broad-based Trade and Investment Agreement (BTIA) and discussion over a number of matters like trade in goods, services, investments, customs cooperation and trade facilitation, competition and intellectual property rights (IPRs) are underway.

So far, 15 rounds of negotiations have been held between the two sides since the negotiations for the BTIA were launched in June 2007. Now, the free trade agreement with the EU is at the closing stage and several issues have been sorted out.

The proposed agreement would give more opportunities for both sides to market access in both goods and services. The EU wants to gain more access into the Indian markets and seeks significant reduction in customs duty on cars, wines and spirits on their exports to India. On the other hand, India is looking at EU as important destinations for its information technology professionals, architects, engineers, teachers and chefs and is seeking single visa for its professionals on short-term contractual visits to the European Union. The agreement will help Indian companies expand in the EU, the country's biggest trading partner. As much as 90 per cent of the bilateral trade in goods and services would be covered under the pact with EU.

The two-way trade between India and EU stood at around $94.43 billion during April-February of FY13. It aggregated to $109.86 billion in FY12. India has already implemented comprehensive FTAs with other countries such as Malaysia, Japan and South Korea.

The CNX Nifty is currently trading at 5,804.95, down by 29.45 points or 0.50% after trading in a range of 5,843.35 and 5,791.55. There were 16 stocks advancing against 33 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were JP Associate up by 1.95%, Bajaj-Auto up by 1.82%, HCL Tech up by 1.59%, Dr. Reddy’s Lab was up 1.36% and Ranbaxy Laboratories up by 1.34%.

On the flip side, Jindal Steel down by 4.06%, IndusInd Bank down by 2.67%, IDFC down by 2.67%, SBI down by 2.24% and Tata Motors down by 2.24% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite tumbled 2.57%, Hang Seng declined 1.08%, Jakarta Composite slipped 0.40%, KLSE Composite contracted 0.29%, Nikkei 225 dipped 0.29%, Straits Times decreased 0.72%, KOSPI Composite dropped 0.40% and Taiwan Weighted was down by 0.35%.

The European markets were trading mixed; France’s CAC 40 added 0.93%, Germany’s DAX descended 0.31% and United Kingdom’s FTSE 100 edged higher by 0.41%.