Benchmark continue weak trade

The Indian benchmarks were witnessing a range bound session with negative bias after a positive start in the late morning session in line with other subdued Asian peers. Besides, a cautious approach by participants ahead of tomorrow's monthly expiry in the derivatives segment and weakening rupee which fell to nearly 9-month low also impacted the trading sentiments. On the global front, most of the Asian equity indices were trading in green at this point of time with Japanese Nikkei share average surging by over half a percent in a morning session on Wednesday, as investors remained unsettled after last week’s tumultuous trade pulled the index down 10 percent from a five and a half year high. Back home, the traders were seen piling up positions in Health Care, FMCG and Auto while selling was seen in Bankex, Capital Goods and Power sector.

In scrip specific actions, Sun Pharmaceutical Industries rose after the pharma major reported a 23.4 per cent rise in quarterly net profit beating market estimates, and India's top drugmaker by market value also announced a bonus share issue. BPCL and Tata Motors traded higher ahead of its results for the quarter ended March 2013.Pidilite Industries gained after the chemical products firm maker reported 27% rise in consolidated net profit at Rs 81.31 crore for the quarter ended March 31. Future Retail traded in green after India's largest listed retail firm sought the Foreign Investment Promotion Board's approval to increase foreign institutional investor holding in the firm to 49% from existing 24%.  Indian Oil Corporation surged after the company is planning to spend Rs 11,000 crore in the current financial year, on projects in the refinery, marketing, pipeline and petrochemical divisions. Hindustan Petroleum Corp (HPCL) jumped after the company reported 66 per cent jump in net profit for the fourth quarter ended March 31, 2013, after the government paid compensation for selling fuel below cost during second half of 2012-13. GAIL tanked despite after the state-owned gas utility company reported 28 per cent jump in its March quarter net profit on the back of rise in margins from gas trading and higher revenues from petrochemical business. Cipla slipped ahead of its quarterly results. Essar Shipping dropped after the company reported consolidated net profit which plunged 99.91 per cent to Rs 5 lakh during the fourth quarter ended March 31, hit hard by dismal performances of its shipping and logistics businesses as well as rising costs. Hindalco Industries plunged after the leading metals producer reported 24.68 per cent decline in standalone net profit at Rs 482.03 crore for the fourth quarter ended March 31, 2013, mainly due to fall in sales and significant rise in interest outgo.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 6,100 and 20,000 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in ratio of 928: 815.

The BSE Sensex is currently trading at 20154.92, down by 5.90 points or 0.03% after trading in a range of 20216.49 and 20080.64. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18% and Small cap index was up by 0.33%.The top gaining sectoral indices on the BSE were, Health Care up by 1.77%, FMCG up by 0.41%, Auto up by 0.40%, PSU up by 0.23% and IT up by 0.20% while, Bankex down by 0.67%, Capital Goods down by 0.58%, Power down by 0.55%, Realty down by 0.51%, and Metal down by 0.09%were the only losers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 6.85%, Hero MotoCorp up by 1.81%, Tata Motors up by 1.69%, Coal India up by 1.10% and ONGC up by 0.93%. On the flip side, HDFC was down by 1.10%, Tata Power was down by 1.04%, Mahindra & Mahindra was down by 0.86%, Gail India was down by 0.80% and HDFC Bank was down by 0.76% were the top losers on the Sensex.

Meanwhile, Industry body FICCI has resisted the move to club allowances with the basic wages for PF deductions saying that the proposal is unfruitful and if implemented will dampen business and investment sentiments. The FICCI said in its notification that the proposal to renotify definition of basic wages under the Employees Provident Fund & Miscellaneous Provisions Act 1952, would have huge financial implications both for industry and the Government’.

By adding further, industry body said that the move may also be counterproductive to the Employees' Provident Fund Organisation (EPFO) as organizations that are extending coverage to employees receiving salaries above Rs 6,500 may choose to step down, which will deprive employees’ coverage under a globally renowned social security scheme. Further, the industry body is of the view that the introduction of a triple test- 'Ordinarily, Necessarily and Uniformly'- for the purposes of defining basic wages will arm the field staff to use their discretion to put additional burden on employers.

The Employees' Provident Fund Organisation had earlier issued its notification on November 30, which suggested that all allowance which are 'Ordinarily, Necessarily and Uniformly' paid to workers will be clubbed with basic wages for the purpose of PF deductions. However, the notification was put on hold later on and EPFO had constituted a committee comprising unionist and employers to discuss on the issue. Accordingly the panel had suggested for clubbing of wages with minor changes in the provisions to labour ministry. Meanwhile, the government has halted its final decision to notify the clubbing of wages. 

As per the provision of EPF scheme 1952, the employers have to contribute 12 per cent of the basic pay and dearness allowance towards the PF deposits of workers every month. Thus with increase in basic wages, the employers' liability would increase. Further the government contributes 1.16 per cent of the basic wages of workers toward their pension account. Therefore, the decision would also result in higher contribution by the central government towards workers' pension accounts. Presently, there are over 50 million subscribers of the scheme and the EPFO has a corpus of over Rs 5 lakh crores in EPF and EPS schemes.

The CNX Nifty is currently trading at 6,102.30 down by 8.95 points or 0.15% after trading in a range of 6,125.05 and 6,083.10. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Sun Pharmaceuticals up by 6.49%, Hero MotoCorp up by 1.69%, Tata Motors up by 1.67%, NMDC up by 1.32% and HCL Technologies up by 1.05%. On the flip side, ACC down by 1.48%, Grasim Industries down by 1.47%, JP Associate down by 1.26%, Ranbaxy down by 1.25% and HDFC down by 1.17% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 8.14 points or 0.35% to 2,329.46, KLSE Composite strengthened 7.59 points or 0.43% to 1,783.75, Nikkei 225 surged 94.20 points or 0.66% to 14,401.74, KOSPI Composite jumped 20.86 points or 1.05% to 2,007.14, Jakarta Composite up 11.54 points or 0.22% to 5,187.77 and Taiwan Weighted was up by 71.46 points or 0.86% to 8,334.51.

On the flip side, Hang Seng declined 148.25 points or 0.65% to 22,776.00, and Straits Times was down by 0.18 points or 0.01% to 3,405.84.