Indian equities trim losses but continue to show lackadaisical moves

Indian equities trim losses in late afternoon session to inch higher as investors started accumulating beaten down shares on attractive valuations. In the fight between bulls and bears to gain control over the market bear seemed to find an upper hand, with bulls trying hard to pounce back and bears are in no mood to loose its side. 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 piling up the position in Health Care sector while selling was witnessed in Realty, Power and Capital Goods sector. L&T and BHEL from Capital goods sector were down by more than half to five percent putting pressure on the markets on fears that their earnings will stay muted due to sluggish economic growth amid elevated interest rates and high inflation.

Tata Motors, M&M and Bajaj Auto from Auto pack was down in red putting the much needed pressure on the markets. DLF, Unitech, DB Realty, Parsvnath Developers, Godrej Properties, HDIL and Sobha Developers from realty pack were down exerting the pressure on the markets. Index heavyweight RIL is seen trading with a cut off around more than one and half percent helping market bleed, with the stock falling for the fifth straight day. ONGC, GAIL, Oil India and Cairn India from OIL & Gas sector were too trading weak exerting pressure on the market. TCS, HCL Technologies and Infosys from IT pack were trading weak dragging the markets lower.  Axis Bank, ICICI Bank, SBI, Kotak Bank and HDFC Bank are down in red by more than one to three and half percent pulling down the market.  Sesa Goa, Tata Steel, SAIL, Jindal Steel, Sterlite and Hindalco from Metals pack were down tracking LMEX, a gauge of six metals traded on the London Metal Exchange, which declined on November 17, 2011 making markets bleed.

However, Hero MotoCorp, Ranbaxy, Cipla, Sun Pharma, Tata Power, Bharti Airtel, HDFC, Wipro and PNB were trading firm in green preventing the markets from falling down further. On the global front, all Asian markets were seen trading in red while the European markets were too trading in red on pessimistic note. The spike in Spanish government bond yields and mounting worries that the exacerbating Euro-zone debt trouble would bite into global economic growth dampened investors’ morale. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,900 and 16,300 levels, respectively. The market breadth on the BSE was negative in the ratio of 615:2132 while, 105 scrips remained unchanged.

The BSE Sensex is currently trading at 16,239.04 down by 222.67 points or 1.35% after trading as high as and 16,387.70 as low as 16,164.99. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading in the negative zone; the BSE Mid cap index plunged 1.70% while Small cap plummeted 2.16%.

On the BSE sectoral space Health Care up 0.04% was the only gainer while Realty down 3.11%, Power down 2.27%, Capital Goods down 2.26%, Metal down 2.08% and PSU down 1.98% were the major losers in the space.

Hero MotoCorp up 3.04%, Sun Pharma up 1.22%, Cipla up 1.14%, Tata Power up 0.63% and Bharti Airtel up 0.42% were the top gainers on the Sensex, while BHEL down 5.30%, JP Associates down 3.83%, Tata Motors down 3.68%, M&M down 3.30% and Maruti Suzuki down 2.80% were the major losers on the index.

Meanwhile, concerned over rise in prices of medicines, the Supreme Court has tasked central government to ensure that the prices remain at same level post introduction of the proposed Pharma Pricing Policy, 2011. 'Prices should not escalate. There are apprehensions that prices will escalate. In the name of the new policy the prices shall not escalate. Because we have much more consumers in India than other parts of the world,' the court observed.

On January 17, a bench of justices G S Singhvi and S D Mukhopadhyaya posted the matter for further hearing. The Additional Solicitor General Parag Tripathi said that the notification of the new policy would take place only after the Group of Ministers (GoM) takes a decision in about three months time.

The issue came up for hearing during a PIL filed in 2003 by the All India Drugs Action Network and others which had complained that presently around 78 drugs are placed under the Drugs (Prices Control) Order, 1995 (DPCO) making rest of the medicines beyond the reach of common man.

In an affidavit, the Department of Chemicals and Petrochemicals, however, informed court that it had initiated action for formulating a new policy, in which “348 medicines including in the National List of Essential Medicines (NLEM), 2011 and associated medicines will be brought under price control.”

As per the Department of Chemicals and Petrochemicals, a draft National Pharmaceutical Pricing Policy 2011 (NPPP-2011) has been circulated among all the stake holders and ministries concerned besides being put on its official website for comments. However, senior counsel Colin Gonzalves representing NGO informed bench that the proposed drug policy was fraught with apprehension of a steep hike and wanted the court to restrain the authorities from taking any step.

The S&P CNX Nifty is currently trading at 4,868.65, lower by 66.10 points or 1.34% after trading as high as 4,902.25 and as low as 4,837.95. There were 12 stocks advancing against 38 declines on the index.

The top gainers on the Nifty were Hero MotoCorp up 3.36%, Ranbaxy up 1.96%, Cipla up 1.46%, BPCL up 1.20% and Sun Pharma up 1.16%.

BHEL down 5.30%, RCOM down 3.99%, JP Associates down 3.83%, Tata Motors down 3.77% and Axis Bank down 3.51% were the major losers on the index.

Asian markets traded on a disappointing note, Shanghai Composite plummeted 1.89%, Hang Seng sank 1.73%, Jakarta Composite plunged 1.02%, KLSE Composite shed 0.40%, Nikkei 225 shaved off 1.23%, Straits Times declined 1.34%, Seoul Composite slumped 2.00% and Taiwan Weighted nosedived 2.08%.

The European markets were trading in red with, France’s CAC 40 down 0.82%, Germany's DAX declined 1.19% and Britain’s FTSE 100 down 0.92%.