Benchmarks continue weak trade; Nifty slips below 5,800 mark

Indian equity markets added losses to continue their weak trade hovering near the lowest point of the day in late afternoon session on account of selling in front line blue chip counters taking cues from weak global counterparts. The trading sentiments were on pessimistic note on downward revision of GDP growth by Reserve Bank of India in its ‘first quarter review of Monetary Policy 2013-14’ which did not augur well with the street. Traders were seen piling position in IT stocks while selling was witnessed in Realty, Oil & Gas and Metal sector stocks. In scrip specific development, Gail India was trading under pressure after foreign brokerage firm Barclays downgraded the company to underweight from overweight, after cutting its earnings per share forecast for fiscal years 2014 to 2016 by 26-31 percent. Colgate-Palmolive (India) was trading in red after Nomura Financial Advisory and Securities downgraded the company to reduce from neutral, saying valuations are now expensive and rising competitive intensity is expected to take a toll on the company’s profitability. Fresenius Kabi Oncology was trading in green after touching 52-week high as the Foreign Investment Promotion Board (FIPB) cleared six proposals envisaging investments of Rs 855 crore in the pharmaceutical sector, including Fresenius Kabi.

On the global front, the Asian markets were trading in green barring KLSE Composite while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,800 and 19,500 levels respectively. The market breadth on BSE was negative in the ratio of 593:1458, while 135 scrips remain unchanged. 

The BSE Sensex is currently trading at 19423.04, down by 170.24 points or 0.87% after trading in a range of 19672.72 and 19412.01. There were 8 stocks advancing against 22 declines on the index.

The broader indices too have enlarged their losses; the BSE Mid cap and Small cap indices were trading lower by 1.61% and 1.56% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.85% was the sole gainer while Realty down by 3.24%, Oil & Gas down by 2.72%, Metal down by 2.57%, PSU down by 2.52% and Power down 2.44% were the top losers on the BSE.

The top gainers on the Sensex were Wipro up by 2.57%, Jindal Steel up by 1.83%, L&T up by 1.62%, TCS up by 1.00% and Infosys up by 0.86%. On the flip side, Hindalco Industries down by 5.46%, Bharti Airtel down by 4.78%, ONGC down by 4.32%, Gail India down by 3.64% and Bajaj Auto was down by 2.93% were the top losers on the Sensex.

Meanwhile, the Foreign Investment Promotion Board (FIPB) has cleared six proposals envisaging investments of Rs 855 crore in the pharmaceutical sector. The main proposal approved by FIPB, chaired by Department of Economic Affairs Secretary Arvind Mayaram include Singapore based healthcare firm Fresenius Kabi Oncology to bring in FDI worth Rs 349 crore and Calyx Chemicals & Pharmaceuticals to bring in foreign investment of Rs 200 crore.

India is one of the world's biggest markets for generic drugs and allows 100 percent FDI through automatic route in pharma for new projects and as for existing firms it must be approved by the FIPB. Last year, the government had decided that all foreign investments in existing domestic pharma firms should be allowed only after clearance by the FIPB, keeping in view the availability of affordable essential drugs in the wake of multinationals acquiring local companies.

Further, the government was of the view that pharma is a growing industry and there is a need to protect the domestic players from multinationals particularly generics so that Indian pharmaceutical industry continue to grow. There are too many pharma proposals pending with the FIPB as several global pharma companies are looking to buy stake in Indian firms. Meanwhile, the government is likely to soon revise the FDI policy with regard to existing pharma companies.

The CNX Nifty is currently trading at 5,772.80, down by 58.85 points or 1.01% after trading in a range of 5,861.30 and 5,769.65. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were L&T up by 1.68%, Jindal Steel up by 1.65%, HCL Technologies up by 1.05%, TCS up by 0.97% and Infosys up 0.86%. On the flip side, BPCL down by 6.45%, DLF down by 5.94%, Hindalco Industries down by 5.68%, Reliance Infrastructure down by 4.91% and NMDC down by 4.76% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite up by 0.70%, Hang Seng up by 0.48%, Jakarta Composite up by 0.53%, Nikkei 225 up by 1.53%, Straits Times up by 0.33%, Seoul Composite up by 0.90%  and Taiwan Weighted added 0.98%, while, KLSE Composite slipped 0.22%.

The European markets were trading in green; France’s CAC 40 was up 0.12%, Germany’s DAX added 0.74% and the United Kingdom’s FTSE 100 jumped 0.49 %.