Markets trading near low point of day; Nifty came off 5,300 mark

 Indian benchmarks extended early losses and currently trading near the low point of day in the late morning session, due to heavy selling in several front line stocks. Nifty came off the 5,300 mark, while 30-share BSE Sensex dropped by 128 points. Investors were trading cautious on renewed worries about the slow progress in resolving the euro zone's debt crisis. A sell off in the US and European markets on Monday amid worries about the debt crisis in the euro zone due to doubts about the effectiveness of the proposed austerity measures, and the resultant weakness in Asian markets are casting a shadow on the Indian bourses this morning. On sectoral front metal, capital goods and banking stocks were among the notable losers. Realty, FMCG, information technology, oil and automobile stocks were trading in red territory. A few stocks from healthcare and PSU sectors were witnessing some support. Maruti Suzuki is down with a loss of 0.6% as company’s sales fell 53.25% in October to 55,595 units due to labour unrest at its Manesar plant, which severely affected production. On the global front, Asian markets continued trading lower on European debt.  Back home, the market breadth favoring the negative trend; there were 1,070 shares on the gaining side against 1,270 shares on the losing side while 114 shares remained unchanged.

The BSE Sensex is currently trading at 17,576.20, down by 128.81 points or 0.73%. The index has touched a high and low of 17,661.78 and 17,537.06 respectively.  There were 9 stocks advancing against 21 declines on the index and one remained unchanged.

The broader indices after outperforming frontline benchmarks in the early trade are currently trading mixed; the BSE Mid cap index was down by 0.24% and Small cap index gained 0.05%.

The top losing sectoral indices on the BSE were Metal down by 1.25%, CG down by 1.11%, Bankex down by 0.84%, Realty down by 0.64% and FMCG down by 0.52%. On the flip side, HC up by 0.17% and PSU up by 0.05% were the gainers on the index.

The top gainers on the Sensex were Sun Pharma up by 1.96%, Tata Motors up by 1.89%, Wipro up by 1.65%, Tata Power up by 1.05% and Hindustan Unilever up by 0.99%.

On the flip side, Sterlite Industries down by 3.65%, ICICI Bank down by2.75%, L&T down by 2.04%, Cipla down by 1.90% and Mahindra & Mahindra down by 1.76% were the top losers on the Sensex.

Meanwhile, the sharp decline in key sectors of coal, natural gas and fertilizer have pulled down the index of eight core industries on the back of rising input costs and high interest rates. The index slowed down to 2.3% in September from 3.3% in September 2010. For the month of September, the Index of Eight core industries, which account for of 37.90% of the Index of Industrial Production (IIP) grew at its slowest pace in last 31-months.

As per the data released by the ministry of commerce and industry, the Index of Eight core industries stood at 131.50 in September 2011 with a growth rate of 2.3% compared to its growth at 3.3% in September 2010.  During April-September 2011-12, the cumulative growth rate of the core industries was 4.9% as against their growth at 5.6% during the corresponding period in 2010-11.

Electricity generation had 8.9% growth in September 2011 compared to its 2.1% growth in September 2010. Electricity generation grew by 9.3% during April-September 2011-12 as against its 4.1% growth during the same period of 2010-11. Steel production had a growth rate of 6.6% in September 2011 against its 11.7% growth in September 2010. Steel production grew by 9.5% during April-September 2011-12 compared to its growth at 7.4% during the same period of 2010-11. Further, Petroleum Refinery Products, which account for 5.94% of IIP grew by 4.4% in September 2011 compared to its growth at (-) 10.2% in September 2010.  Petroleum refinery production registered a growth of 4.7% during April-September 2011-12 compared to its 2.6% growth during the same period of 2010-11.

Cement production registered a growth of 0.9% in September 2011 against its 5.2% growth in September 2010. Cement production grew by 2.5% during April-September 2011-12 compared to its growth at 4.7% during the same period of 2010-11.  Crude oil production registered a growth of 0.1 % in September 2011 compared to its growth at 12.5% in September 2010. During April-September 2011-12, Crude oil production registered a growth of 5.1% compared to its growth at 10.2% during the same period of 2010-11.

However, sector like Coal production registered a growth of (-) 17.8% in September 2011 compared to its growth at (-) 1.8% in September 2010. Coal production grew by (-) 4.8% during April-September 2011-12 compared to its growth at 0.2% during the same period of 2010-11. Natural Gas production registered a growth of (-) 6.4% in September 2011 compared to its growth at 12.6% in September 2010. Natural Gas production registered a growth of (-) 8.5% during April-September 2011-12 compared to its growth at 25.2% during the same period of 2010-11. Fertilizer production registered a growth of (-) 2.1% in September 2011 against its growth at 0.3% in September 2010. During April-September 2011-12, fertilizer production grew by 0.6% compared to its growth at (-) 2.3% during the same period of 2010-11.

The record decline in core sectors is because of the poor performance of the mining sector, which is suffering from the unseasonal rains and policy uncertainty. This could be largely attributed to the strike at Singareni Collieries that hit production and the heavy rains that inundated coal fields in Eastern India. The decline in growth of core industries is expected to affect the growth of IIP for month of September. The industrial production had dropped to a 21-month low of 3.8% in July however; it recovered marginally to 4.04% in month of August.  

The S&P CNX Nifty is currently trading at 5,283.70, down by 42.90 points or 0.81%. The index has touched a high and low of 5,310.85 and 5,275.50 respectively. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Cairn India up by 2.06%, Sun Pharma up by 1.88%, Tata Motors up by 1.76%, Wipro up by 1.69% and HUL up by 0.85%.

Sterlite Industries down by 3.57%, ICICI Bank down by 2.94%, Cipla down by 2.27%, HCL Technologies down by 2.25% and Ambuja Cement down by 2.12%, were the major losers on the index.

Asian equity markets were trading mostly in the red; Hang Seng declined 1.93%, Jakarta Composite lost 0.49%, KLSE Composite was down by 0.53%, Nikkei 225 plunged 1.69%, Straits Times descended 0.88% and Shanghai Composite edged lower by 0.32%.

On the flip side, Taiwan Weighted up by 0.42% and Seoul Composite up by 0.25% were the gainers among the Asian pack.