Benchmarks snap three days winning streak

After three consecutive sessions of rally, Indian equity markets snapped the choppy day of trade slightly in red as investors opted to book their profits ahead of the consumer price index and industrial production data due on May 10, 2013, followed by wholesale inflation data on May 13. Markets, throughout the session, see-sawed in and out of green zone but slipped towards south in the last leg of trade on the back of disappointing Q4 numbers reported by Asian Paints and Jubilant FoodWorks. Shares of Asian Paints plunged close to 4% after the company reported a 3.5% drop in net profit for the fourth quarter ending March, 2013, while Jubilant FoodWorks’ stocks tumbled close to 7.50% after the firm reported a lower-than-expected 14% year-on-year rise in fourth quarter net profit at Rs 33 crore. However, the losses remain capped as some support came in from PSU banking counters after banks like, Punjab National Bank (PNB) and Union Bank of India (UBI) reported better-than-expected Q4 numbers.

Global cues too remained unsupportive with European counters trading lower as investors remained on sidelines ahead of a Spanish bond auction and a UK central bank rate decision. Asian markets too turned choppy after a firm opening after Chinese data showed consumer prices rose more than expected. The country’s consumer price index rose 2.4% in April from the year-ago period, driven by food prices while, the producer price index, which measures wholesale prices, dropped a sharper-than-expected 2.6%. However, South Korea’s KOSPI bucked the trend by ending higher after the Bank of Korea surprised investors by lowering its benchmark rate to 2.5% from 2.75%, the first cut in seven months.

Back home, sentiments remain dampened after rupee depreciated by 10 paise to 54.26 per dollar following demand for the US currency from importers despite its weakness overseas. The downside was also supported by selling in banking counter after Cobrapost exposed 10 more banks in money laundering case namely IndusInd Bank, Bank of Baroda, ING Vysya Bank, Allahabad Bank, Bank of India, Central Bank of India, Bank of Maharashtra, HDFC Bank, ICICI Bank and Axis Bank. However, the losses remain capped as buying in software and technology counters supported the sentiments. Stocks like Infosys, TCS, Wipro and HCL Technologies edged higher on the back of better-than-expected earnings by select US companies indicating that the world's largest economy is on the path of revival. Additionally, state-run PSU OMC’s, viz. BPCL, HPCL and IOC all settled higher on expectation of major hike in diesel price. Further, with the Karnataka assembly polls coming to an end, investors’ are widely expecting a hike in diesel prices, this time may be even double of the otherwise monthly increase of 50 paise a litre.

The NSE’s 50-share broadly followed index Nifty declined by about twenty points but managed to hold its psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex dropped by over fifty to finish below its psychological 19,950 mark. The broader markets too traded in-line with benchmarks and snapped the session in red terrain.

The market breadth was evenly divided as there were 1,079 shares on the gaining side against 1,322 shares on the losing side, while 167 shares remain unchanged.

Finally, the BSE Sensex lost 51.14 points or 0.26% to settle at 19,939.04, while the CNX Nifty declined by 19.15 points or 0.32% to end at 6,050.15.

The BSE Sensex touched a high and a low of 20,058.48 and 19,903.83, respectively. The BSE Mid cap index down by 0.44% and Small cap index was down by 0.04%.

The top gainers on the Sensex were, SBI up by 1.81%, TCS up by 1.52%, Wipro up by 0.80%, Hindalco up by 0.54% and ITC up by 0.48%, while Sun Pharma down by 3.73%, Jindal Steel down 3.42%, Sterlite Industries down 2.28%, Cipla down 1.47% and Reliance down by 1.33% were the top losers on the index. 

The top gainers on the BSE Sectoral space were IT up 0.87%, TECk up 0.50%, PSU up 0.20%, FMCG up 0.10% and Power up 0.07%, while Health Care down 1.62%, Metal down 1.46%, Realty down 1.10%, Consumer Durables down 0.88% and Oil & Gas down 0.62% were the top losers on the sectoral space.

Meanwhile, the government is planning to allow gas-powered projects to import the fuel and pass on the incremental costs as higher charges. The plan, similar to the one being worked out for coal-based power projects, is in the initial stages and will help stranded gas-fuelled power generation capacity languishing in the country, thereby boost the flagging economic growth.

The cabinet committee on economic affairs on 22 April asked the ministries of coal and power to draft a proposal within three weeks that allows for the pass-through of the additional fuel costs. This also comes at a time when an empowered group of ministers (eGoM) is to consider a revision in gas prices based on the recommendations of C. Rangarajan, chairman of the Prime Minister’s economic advisory council, according to whose formula the new price will be around $8.4 per million British thermal units (mmBtu). The current price of domestic gas in India ranges between $3.5 and $5.73 per mmBtu. Imported natural gas costs around $14 per mmBtu.

In addition, the power ministry is also working on a so-called peaking power policy for gas that will encourage power distribution companies (discoms) to invite bids from generation utilities for meeting power shortages during peak consumption hours-normally between 8am and 11am and 6.30pm and 10pm. The power ministry has also asked eGoM to consider power plants in the priority sector for gas allocation.

The CNX Nifty touched a high and a low of 6,084.70 and 6,040.45 respectively. 

The top gainers on the Nifty were PNB up by 4.70%, HCL Tech up 2.45%, Ambuja Cement up 2.09%, SBI up 1.88% and Reliance Infra up by 1.85%.

On the flip side, the top losers of the index were, Jindal Steel down 3.78%, Asian Paints down 3.72%, Sun Pharma down 3.30%, NMDC down 2.84% and Axis Bank down by 2.27%.

The European markets were trading mixed, France’s CAC 40 down by 0.72%, the United Kingdom’s FTSE 100 up by 0.04% and Germany’s DAX up by 0.06 points.

Asian stock markets ended mixed on Thursday overlooking strong Australian jobs data and a surprise interest rate cut by South Korea but investors remained cautious on concerns that a pick-up in inflation in China will limit its policy options. Japanese market started on a firm note with investors picking up stocks, tracking a positive lead from Wall Street but closed lower on profit booking. Chinese Shanghai Composite went home with red mark as China witnessed increase in inflation to 2.4% in April from 2.1% in March. However, South Korea's KOSPI ended higher after the Bank of Korea surprised investors by lowering its benchmark rate to 2.5% from 2.75%, the first cut in seven months.

Indonesian market remained shut for the trade today.