Weakness at Dalal Street gains strength; broader indices too bear the brunt

Weakness at Dalal Street has gained strength as the frontline indices along with the broader indices have slipped deep and fast in red in the wake of the daunting global set up. Growing uncertainty over whether newly formed governments in Italy and Greece would be able to implement effective austerity measures has mainly grown wary investors skeptical about investing in risky equities. Overnight on Wall Street, US stocks declined on Monday as rising bond yields in Italy and other euro zone countries deepened concerns that Europe will struggle to contain its sovereign debt crisis. Adding to the negative sentiment, industrial production in the euro zone fell 2% in September, the most since early 2009. The Dow Jones industrial average fell 75 points, or 0.61%, at 12,079. The Standard & Poor's 500 Index declined 12 points, or 0.96%, at 1,252. The Nasdaq Composite Index lost 22 points, or 0.8%, at 2,657. Meanwhile, Asian shares too were trading in somber mood owing to lingering uncertainties over austerity measures for European crisis. The US future indices too were showing a downtick in the screen trade.

Back home, temporary relief came to the investors in the form of report that stated Indian state-run retailers may cut petrol prices from November 16, 2011- the first cut in nearly three years and the first in the 18 months since the government ended controls. The report further stated that cut could be for at least 0.60 rupees a litre, or about 1 percent. On the BSE Sectoral front, stocks from Healthcare, Auto and Consumer Durable counters topping the chart, are striving hard to lid the loss of 30 share barometer gauge-Sensex- which has now by shed close to 30 points and is oscillating below 17100 mark. Meanwhile, broadly followed 50 share index- Nifty-declining over 15 points is currently trading a bit more than 5100 mark. The broader indices too have been singled out for punishment. The overall market breadth on BSE is in the favour of declines which have paced out advances in the ratio of 1523:653, while 91 shares have remained unchanged.

The BSE Sensex is currently trading at 17,091.13, down by 27.61 points or 0.16%. The index has touched a high and low of 17,172.09 and 17,034.07 respectively. There were 12 stocks advancing against 18 declining one’s on the index.

The broader indices too were down and out in red; the BSE Mid cap and Small cap indices declined 0.95% and 1.02% respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.46%, Auto up by 0.16%, CD up by 0.13%, IT up by 0.08% and TECk was up by 0.02%. While, Realty down by 2.30%, Power down by 0.87%, Oil & Gas down by 0.76%, Bankex down by 0.51% and FMCG down by 0.49% were the only losers on the index.

The top gainers on the Sensex were Cipla up by 6.16%, Tata Motors up by 1.85%, Jindal Steel up by 1.27%, HDFC Bank up by 1.01% and Bajaj Auto down by 0.68%.

On the flip side, Tata Power down by3.58%, DLF down by 2.69%, Tata Steel down by 1.44%, ICICI Bank down by 1.14% and HUL down by 1.03% were the top losers on the Sensex.

Meanwhile, India’s public sector oil marketing companies (OMCs) are likely to announce a reduction in petrol prices after the meeting of chief executives of the three downstream companies, which is scheduled on November 16. The stability in American dollar and softening international crude oil prices are seen as the chief reasons behind the plans of petrol price cut.

The companies are expected to announce a cut of around Rs 2 per litre in petrol prices, which would come in contrast with the Rs 1.80 per litre petrol price hike effected earlier this month. The price cut once announced will be the first cut in about three years and the first in the eighteen months since the government completely decontrolled gasoline prices in June 2010.

The small window of opportunity to reduce the fuel prices has also emerged due to the softening in Singapore prices, which has partially offset the impact of a declining rupee. According to reports, petrol prices averaged $115.8 per barrel in November against $121 per barrel price taken at the time of the Rs 1.80 per litre hike in petrol price. Also, the rupee has averaged Rs 49.20 per US dollar, which is less than the October average.

State-owned OMCs earlier this month hiked the petrol price by Rs 1.80 per litre, the fourth increase this year, as the rupee fell from Rs 46.29 a dollar to Rs 49.40 a dollar.

The S&P CNX Nifty is currently trading at 5,133.55, down by 14.80 points or 0.29%. The index has touched a high and low of 5,158.75 and 5,120.70 respectively. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Cipla up by 6.21%, Tata Motors up by 2.31%, Jindal Steel up by 1.24%, IDFC up by 1.12% and HDFC Bank up by 0.91%.

On the flip side, Tata Power down by 4.29%, BPLC down by 3.29%, DLF down by 2.75%, Ranbaxy down by 1.94% and Axis Bank down by 1.89% were the major losers on the index.

All the Asian peers were trading in the red; Shanghai Composite declined 0.14%, Hang Seng plunged 1.09%, Jakarta Composite slipped 0.69%, KLSE Composite inched lower by 0.01%, Nikkei 225 lost 0.86%, Straits Times knocked down by 0.38%, Seoul Composite was down by 0.98% and Taiwan Weighted too lost 0.56%.