Indian equities trade near the lowest point of day; Nifty breaches 5,000 mark

Indian equities drifted down in late afternoon session to trade at the lowest point of the day as profit booking became inevitable in absence of any positive triggers and as food inflation remains near double digits. The local benchmarks lacked fervor to tread to higher levels as lingering turbulences over the Euro-zone debt continued to dissuade market participants from taking larger bets. Traders were seen selling in Oil & Gas, Power and Auto sector. Maruti and Tata Motors from Auto pack were down putting pressure on the markets. Index heavyweight RIL is seen trading with a cut off around more than three percent helping market bleed, with the stock falling for the fourth straight day. ONGC from OIL & Gas sector was too trading weak exerting pressure on the market. Siemens, Reliance Power and Tata Power from Power sector were trading with a cut of around one to three percent dragging the market. SAIL, Sesa Goa, Jindal Steel, Sterlite and Tata Steel from Metal counters were in red putting pressure on the markets. However, Hindalco Industries, SBI, Cipla, HUL, Bajaj Auto and L&T were trading firm in green preventing the markets from falling down further.

In scrip specific development, Shree Renuka Sugars is firm in green on bargain hunting, since the stock was down by more than 40% in the preceding eleven sessions on back of discouraging quarterly numbers. Shares of three public sector oil marketing companies HPCL, BPCL and IOC were trading weak in red after crude oil price crossed $100 per barrel on the New York Mercantile Exchange on November 16, 2011. Bharti Airtel is trading in green after the company has decided to hike their ISD tariffs to a few chosen destinations, for all its users by 10 percent. On the global front, all Asian markets were seen trading in mix while the European markets were trading in red on pessimistic note. German Chancellor Angela Merkel at an industry association reiterated her opposition to common euro zone debt because that will remove incentives for governments to implement budgetary reforms. France and Germany are at odds over whether the European Central Bank should intervene and bring down the bond market yields. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,000 and 16,700 levels, respectively. The market breadth on the BSE was negative in the ratio of 1031:1655 while, 128 scrips remained unchanged.

The BSE Sensex is currently trading at 16,623.39 down by 152.48 points or 0.91% after trading as high as and 16,807.15 as low as 16,610.55. There were 7 stocks advancing against 23 declines on the index.

The broader indices were too trading in the negative zone; the BSE Mid cap index shed 0.56% while Small cap declined 0.37%.

On the BSE sectoral space there were no gainers while Oil & Gas down 2.21%, Power down 1.25%, Auto down 1.05%, PSU down 1.00% and Metal down 0.91% were the major losers in the space.

Hindalco up 1.87%, Cipla up 1.31%, SBI up 0.96%, Sun Pharma up 0.88% and Hero MotoCorp up 0.83% were the major gainers on the Sensex, while JP Associates down 4.40%, Maruti Suzuki down 4.15%, Tata Motors down 3.43%, Reliance Industries down 3.20% and BHEL down 2.82% were the major losers on the index.

Meanwhile, India’s weekly food inflation measured by the Wholesale Price Index (WPI), despite easing for the second consecutive week at 10.63% for week ended on November 05 compared to 11.81% in the last week, remained in double digits. This decline in food inflation came even after the prices of agricultural items, barring onions and wheat, continued to rise on an annual basis.

According to the data released by the Ministry of Commerce and Industry, the index for ‘Food Articles’ group declined by 0.9% to 199.8 (Provisional) from 201.7 (Provisional) for the previous week due to  lower prices of fish-inland (5%), masur (4%), poultry chicken (3%), fruits and vegetables (2%) and ragi, urad, maize, gram, wheat and condiments & spices (1% each).  However, the prices of bajra (3%), jowar (2%) and tea (1%) moved up.

Even the index for ‘Non-Food Articles’ group declined by 0.9% to 175.9 (Provisional) from 177.5 (Provisional) for the previous week due to lower prices of logs and timber (17%), mesta (10%), flowers (6%), raw rubber and rape and mustard seed (3% each) and raw jute (2%). However, the prices of castor seed (5%), sunflower (2%) and soyabean, linseed and gaur seed (1% each) moved up.

As a result the index for ‘Primary Articles’ which accounts for 20.12% of the WPI declined by 0.8% to 203.0 (Provisional) from 204.7 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 10.39% (Provisional) for the week ended November 05, 2011 as compared to 11.43% (Provisional) for the previous week.

Meanwhile, the index for ‘Fuel and Power’ group, which accounts for 14.91% of WPI, rose by 1% to 171.5 (Provisional) from 169.8 (Provisional) for the previous week due to higher prices of aviation turbine fuel (6%), furnace oil (5%), naphtha (4%) and light diesel oil and petrol (3% each).

Concerned over the inflationary spiral, the government said, it is taking steps to remove supply bottlenecks and expects prices to ease from December. 'We are taking care to remove the supply constraints and I do hope from the month of December, inflation pressure would be moderate,' Finance Minister Pranab Mukherjee said.

Headline inflation, which also factors in manufactured items, has been above the 9 percent-mark since December, 2010. It stood at 9.73% in September this year. The RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation.

The S&P CNX Nifty is currently trading at 4,972.05, lower by 58.40 points or 1.16% after trading as high as 5,036.80 and as low as 4,969.55. There were 12 stocks advancing against 38 declines on the index.

The top gainers on the Nifty were Hindalco up 1.58%, Cipla up 1.32%, Reliance Infra up 0.98%, SBI up 0.91% and Sun Pharma up 0.85%.

JP Associates down 4.48%, Maruti down 4.10%, SAIL down 4.00%, Siemens down 3.64% and Tata Motors down 3.59% were the major losers on the index.

Asian markets traded on a mixed note, Nikkei 225 gained 0.19%, Seoul Composite surged 1.11% and Taiwan Weighted rose 0.01%.

On the flipside, Shanghai Composite down 0.16%, Hang Seng declined 0.76%, Jakarta Composite shed 0.60%, KLSE Composite eased 0.77%, Straits Times declined 0.87%.

The European markets were trading in red with, France’s CAC 40 down 0.88%, Germany's DAX declined 1.09% and Britain’s FTSE 100 down 0.87%.