Benchmarks add losses; Nifty below 5,850 mark

Indian equity markets enlarged losses to continue weak trade in the late afternoon session on account of selling in front line counters. The sentiments turned pessimistic after August WPI inflation surprisingly shot back to over 6 percent mark coming at 6.10%, as compared to 5.79% (provisional) for the previous month. Traders were seen piling positions in Bankex, FMCG and Auto stocks, while selling was witnessed in Realty, Health Care and IT sector stocks. In scrip specific development, Ranbaxy Laboratories dropped on report that the company has been issued import alert by US Food & Drug Administration (USFDA) on September 13 for its Mohali unit. Financial Technologies (FT) was trading in red after Forward Markets Commission (FMC) issued its first report on warehouses of National Spot Exchange (NSEL), promoted by FT that only 15% stock was found in NSEL’s 16 warehouses and the value of these stocks is only Rs 358 crore against NSEL’s stated value of warehouses at Rs 2,389 crore. Power Grid Corporation of India was trading in green as follow-on public offering plans of the company firms up.

On the global front, all the Asian markets barring Shanghai Composite ended in green, while the European markets were too trading on optimistic note.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,850 and 19,700 levels respectively. The market breadth on BSE was negative in the ratio of 981:1206, while 107 scrips remained unchanged. 

The BSE Sensex is currently trading at 19685.76 down by 47.00 points or 0.24% after trading in a range of 20,086.43 and 19,596.15. There were 12 stocks advancing against 18 declines on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.63%, while Small cap index also down by 0.52%.

The top gaining sectoral indices on the BSE were, Bankex up by 1.42%, FMCG up by 0.38% and Auto up by 0.20% while, Realty down by 3.08%, Health Care down by 2.36%, IT down by 1.58%, Metal down by 1.57% and TECK down by 1.18% were the top losing indices on BSE.

The top gainers on the Sensex were, ICICI Bank up by 2.86%, Maruti Suzuki up by 2.66%, Hero MotoCorp up by 2.36%, HDFC Bank up by 2.03% and NTPC up by 1.70%. On the flip side, Sesa Goa down by 4.08%, BHEL down by 2.85%, Coal India down by 2.63%, Reliance Industries down by 2.00% and TCS down by 1.82% were the top losers on the Sensex.

Meanwhile, in order to restrict rising imports of electronic products and to boost domestic industry as well as bring down the widening current account deficit (CAD), the government is looking to raise duties on electronic items, which are not covered by the duty-free Information Technology Agreement (ITA) of the World Trade Organisation.  In the previous fiscal, Indian electronics goods exports stood at $31 billion, which was around 7 per cent of total imports. Imports of electronics items have already crossed $10 billion mark in April to July period of current fiscal, despite various measures taken by the government to promote domestic industry.

As per the commerce department, efforts are continued to identify products that are not part of the IT Agreement (ITA) but have escaped higher duties, as the government has lost track over the years of electronic items that may not be part of the pact on account of several changes in the Import-Export Classification Code for products in India after WTO’s ITA. Information Technology Agreement, signed by 29 members including India and was implemented in 1996 and all signatories of the ITA agreed to eliminate duties on identified electronic products.

Meanwhile, the government is in a move to check imports to bring down the CAD, which widened to a record high at 4.8% in the previous fiscal. Therefore, it recently set up a sub-committee of officials from the Revenue Department, the Commerce Department and the IT Ministry to examine the present classification of electronic items, including IT products, and trace them back to the 1996 classification to arrive at what products were actually covered originally by the pact. With the completion of process, the government will decide where it can increase import duties electronic products without violating WTO rules. 

The CNX Nifty is currently trading at 5,833.20 down by 17.40 points or 0.30% after trading in a range of 5,957.25 and 5,798.15. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 2.94%, ICICI Bank up by 2.75%, Hero MotoCorp up by 2.51%, BPCL up by 2.34% and Power Grid up by 2.26%. On the flip side, Ranbaxy Laboratories down by 28.07%, HCL Tech down by 4.62%, Sesa Goa down by 4.38%, Ultratech Cement down by 3.71% and DLF down by 3.22% were the major losers on the index.

Most of the Asian equity indices were trading in green barring Shanghai Composite down by 0.22% which was the sole loser while Seoul Composite up by 0.96%, Taiwan Weighted up by 1.39%, Straits Times up by 1.82%, Hang Seng up by 1.47% and Jakarta Composite up by 2.57% remained on the winning list.

Nikkei 225 remain closed today on account of ‘Respect for the Aged Day’ occasion. Malaysian market - KLSE Composite remain closed today i.e. September 16, 2013 in conjunction with the Malaysia Day holiday.

The European markets were trading in green; France’s CAC 40 was up 0.84%, Germany’s DAX added 1.15% and UK’s FTSE 100 gained 0.83%.