Sensex, Nifty continue to trade in red; Auto, FMCG down

The benchmarks were trading under pressure in the late morning session tracking weak global cures and sell off in other Asian markets. With the recent rupee weakness and its negative implications for inflation, markets have priced in an unchanged repo rate in the upcoming RBI monetary policy meet. Diesel and petrol prices are likely to be hiked over the weekend to adjust for the inflationary impact of the rupee weakness. The Chief Economic Adviser Raghuram Rajan has talked about raising FDI caps across sectors to enable long-term financing of the CAD and reduce dependence on short term foreign portfolio flows. These steps could provide support to markets. Massive foreign fund outflows due to weak factory output and sticky inflation also put pressure on local equities. Even global rating agency Fitch revising India’s sovereign credit outlook to stable from negative could not alter the trading sentiment.

On the global front, all the Asian equity indices were trading with a massive cut of 1-5 per cent in Thursday’s morning deals with Japanese Nikkei declining over four and a half percent, dipping to levels seen before the central bank’s sweeping monetary policy stimulus in early April, as the yen rebounded, sending shares of exporters tumbling. Back home, the traders were seen selling in Auto, FMCG and PSU sector. In scrip specific actions, L&T zoomed after the construction major bagged a Rs 900-crore contract from Wave Group's realty arm Wave Infratech to build residential towers in Noida. Bharti Airtel rose after Bharti Telecom, a promoter group entity of Bharti Airtel, purchased over 18 lakh shares of the telecom firm for around Rs 50 crore through open market transactions this week. Gujarat Gas Company soared after the London-based BG Group announced that it has completed the sale of its 65.12 per cent stake in India's largest private natural gas distributor Gujarat Gas Co (GGCL) for about Rs 2,460 crore to GSPC. Apollo Tyres slumped despite after the tyre maker said it will acquire US-based Cooper Tire & Rubber Company in an all-cash transaction valued at approximately Rs 14,500 crore. Sun Pharm dropped after Pfizer Inc said Teva Pharmaceuticals Industries and Sun Pharmaceutical Industries would pay $2.15 billion to settle a patent infringement lawsuit related to its acid-reflux drug Protonix.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5,700 and 18,000 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 464:1129. The BSE Sensex is currently trading at 18818.32, down by 222.81points or 1.17% after trading in a range of 18914.13 and 18804.41. There were 6 stocks advancing against 24 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.93% and Small cap index was up by 0.71%.

There were no gaining sectoral indices on the BSE while Auto down by 2.26%, FMCG down by 1.44%, PSU down by 1.17%, Health Care down by 1.15%, and IT down by 1.10% were the top losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.92%, Hindalco Industries up by 1.30%, Tata Steel up by 0.47%, SBI up by 0.34%, and L&T up by 0.04%. On the flip side, Tata Motors was down by 3.85%,%, Sun Pharma was down by 3.47%, Wipro was down by 2.77 , Maruti Suzuki was down by 2.31% and ITC was down by 2.11% were the top losers on the Sensex.

Meanwhile, In midst of controversy over the oil ministry’s proposal to raise natural gas prices, Oil Minister M Veerappa said that the revision in rates was a contractual requirement that will help remove policy uncertainty and spur investments. Citing that the current rate of $4.2 uneconomical to produce gas from deep-sea fields, Moily has proposed to price all domestic gas at a uniform rate suggested by a panel headed by Prime Minister’s economic advisor C Rangarajan.   

Moily said that the oil ministry has lowered the price that Rangarajan committee had suggested in the interim to market pricing. All domestic gas, conventional and unconventional, is proposed to be priced on a quarterly average of international hub price and actual cost of imported LNG, which currently comes to $6.775. Further, Rangarajan panel suggested pricing will be valid till the end of 12th Plan and thereafter a market driven regime to be recommended by a separate committee will come in play, Moily added.

By adding further, the minister said that India has vast resources of oil and gas that can help to cut $160 billion oil import bill but without the right pricing and policy regime, resources will remain trapped inside earth. He added that gas pricing is an issue and investors don’t want to invest unless we tell them the path of pricing the gas. 

The CNX Nifty is currently trading at 5,702.20 down by 58.00 points or 1.01% after trading in a range of 5,729.85 and 5,695.70. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.20%, Hindalco up by 1.46%, Tata Steel up by 0.79%, Axis Bank up by 0.69% and SBI up by 0.54%. On the flip side, Tata Motors down by 3.82%, PNB down by 3.34%, Sun Pharmaceuticals down by 3.33%  Bank of Baroda down by 2.98%, and JP Associates down by 2.24% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite slumped 68.09 points or 3.08% to 2,142.81, Hang Seng tumbled 595.58 points or 2.79% to 20,759.08, Jakarta Composite declined 79.90 points or 1.70% to 4,617.99, KLSE Composite dropped 18.94 points or 1.07% to 1,756.18, Nikkei 225 crumbled 735.79 points or 5.54% to 12,552.85, Straits Times decreased 52.23 points or 1.66% to 3,101.59, KOSPI Composite contracted 18.12  points or 0.95% to 1,891.79 and Taiwan Weighted was down by 146.90  points or 1.81% to 7,962.09.