Indian equities drifted lower; trade continues on a weak note

Indian equities drifted lower and are trading on a weak note in absence of buying among investors due to lack of any upside trigger. A week after the benchmarks’ sharp resurgence of over six percent, investors largely are looking to consolidate their position. Traders were seen piling up the position in FMCG, TECk and IT sector while selling was witnessed in Oil & Gas, Metal and Auto sector. FMCG sector was in limelight as HUL was up by more than three and half percent giving the much needed support. Banking sector was seen supporting the benchmarks with Bank of Baroda, ICICI Bank trading in green on posting decent numbers while Axis Bank, PNB and HDFC Bank also supported by trading in green. Oil & Gas sector was the biggest drag pulling the benchmarks with RIL, ONGC, Cairn India and BPCL trading with a cut of around one to three percent. Metal stocks like Hindalco, Sterlite, SAIL and Jindal Steel were trading with a cut of around one and half to about three percent. In scrip specific development, Textile stocks like Alok Industries, Arvind, Patspin India and Vardhman Textiles were seen trading in green on reports that the government approved setting up 21 textile parks over 36 months. On the global front, Asian markets were trading in red barring KLSE Composite while the European markets were too trading in red on pessimistic note. The optimism over the solution of Euro-zone debt trouble fizzled out and marketmen took a breather post seeing a sharp rally last week. Investors shifted their attention from Europe to the important US Federal Reserve meet and economic data that are scheduled to be announced later this week. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,300 and 17,700 levels, respectively. The market breadth on the BSE was positive in the ratio of 1440:1265 while, 102 scrips remained unchanged.

The BSE Sensex is currently trading at 17,719.01 down by 85.79 points or 0.48% after trading as high as 17,813.11 and as low as 17,686.27. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in the green terrain; the BSE Mid cap index climbed 0.31% while Small cap added 0.30%.

On the BSE sectoral space, FMCG up 0.39%, TECk up 0.36%, IT up 0.34% and Bankex up 0.33% were the only gainers while Oil & Gas down 1.40%, Metal down 1.34%, Auto down 1.24%, Consumer Durables down 0.66% and PSU down 0.59% were the major losers in the space.

HUL up 3.56%, NTPC up 1.23%, HDFC Bank up 0.93%, Tata Steel up 0.82% and Hero MotoCorp up 0.81% were the major gainers on the Sensex, while Tata Motors down 3.78%, Sterlite Industries down 2.71%, Hindalco down 2.67%, DLF down 2.30% and Jindal Steel down 2.11% were the major losers on the index.

Meanwhile, the government has ended review of safeguard duty on import of certain aluminium products from China, as the domestic industry did not press for continuation of the tax. The revenue department under the ministry of finance in its notification said that 'the review safeguard investigation...concerning imports of aluminium flat rolled products and aluminium foil into India from China is hereby terminated.'

The review examination, which started in February 2011, was terminated as applicants the Aluminium Association of India asked to end the probe. The Aluminium Association of India in February this year had asked to review for continued impose of tax for another 2 years, by arguing that the imports were causing market disruption.

The Aluminium Association of India in the application had said that the expiry of safeguard duty would cause damage to the domestic industry.  The industrial body had also submitted evidences of continued imports and threat to market disruption in support of their claim.

The Directorate General of Safeguard in the Revenue Department said that the investigation has become 'infructuous' upon request for withdrawal of the probe application.

Despite the impose of the safeguard duty, during 2010-11, the import of aluminium flat rolled products and aluminium foil from China surged by 28.87% and 28.36% from last year. Normally a country imposes safeguard duty to provide temporary relief to domestic producers whereas they adjust to the pricing tactics of competitive foreign players. 

The S&P CNX Nifty is currently trading at 5,329.35, lower by 31.35 points or 0.58% after trading as high as 5,360.25 and as low as 5,316.95. There were 11 stocks advancing against 39 declines on the index.

The top gainers on the Nifty were HUL up 3.38%, NTPC up 1.34%, IDFC up 1.33%, Sesa Goa up 1.17% and PNB up 0.89%.

Tata Motors down 4.21%, Ambuja Cement down 4.14%, DLF down 3.01%, BPCL down 2.90% and Hindalco down 2.88% were the major losers on the index.

Asian markets traded on a sluggish note, Shanghai Composite shed 0.21%, Hang Seng plunged 0.77%, Jakarta Composite sank 1.06%, Nikkei 225 slipped 0.69%, Straits Times shaved off 1.31%, Seoul Composite plummeted 1.06% and Taiwan Weighted fell 0.37%.

On the flipside, KLSE Composite advanced 0.58%.

The European markets were too trading in red with, France’s CAC 40 down 1.53%, Germany's DAX dropped 1.06% and Britain’s FTSE 100 down 0.94%.