Markets continue weak trade in afternoon session

Indian equity benchmarks continued their weak trade in the afternoon session on account of selling pressure witnessed in banking, PSU and oil and gas stocks. Investors’ sentiments were dented after Confederation of Indian Industry (CII) survey, based on the study of 91 industrial sectors in the domestic economy, revealed that Indian industry growth in the period of July-September, 2013 remained dismal. Further, fall in rupee value and weak Asian cues also added to the pessimistic sentiments. Investors also remained cautious ahead of the Infosys quarterly results later this week that will start the earnings season for July-September quarter. Banking stocks came under heavy selling pressure today with bankex was trading down by over 2.5% on BSE amid concerns over the deteriorating assets quality of Indian banks.

On the global front, most of the Asian markets were trading in red with Japanese index Nikki down by 1.22%, as politicians in Washington showed no signs of making progress over the weekend in resolving the US budget standoff. Back home, the NSE Nifty and BSE Sensex were trading down their psychological 5,900 and 19,800 levels respectively. The market breadth on BSE was negative, out of 1,957 stocks traded, 869 stocks advanced, while 957 stocks declined on the BSE. 

The BSE Sensex is currently trading at 19,707.99 down by 207.96 points or 1.04% after trading in a range of 19,888.41 and 19,647.88. There were only 12 stocks advancing against 18 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.31%.

The gaining sectoral indices on the BSE were Healthcare up by 0.77%, IT up by 0.61%, Teck up by 0.41% and Metal up by 0.07%. While, Bankex down by 2.58%, PSU down by 1.26%, Oil and Gas down by 1.21%, Capital Goods down by 0.92% and Realty down by 0.79% were remained the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.92%, Hindalco Inds up by 1.53%, Jindal Steel up by 1.25%, BHEL up by 0.87% and Dr Reddy’s Lab up by 0.65%. On the flip side, ICICI Bank down by 3.27%, Coal India down by 3.19%, HDFC Bank down by 2.87%, HDFC down by 2.16% and L&T down by 1.87% were the only losers on the Sensex.

Meanwhile, amid rising concerns over Indian gold imports, all India Gems & Jewellery Trade Federation (GJF) said that the country’s gold imports, witnessing contraction in the past few months, is expected to pick up and may touch 725 tonnes this fiscal. The GJF said that gold import is presently at a standstill, but it may pick up in the next three months till December to 150 tonnes mainly due to the festival season.

During April-September 2013, India imported 354 tonnes of gold, of which 118 tonnes came in April, 162 tonnes in May, 31 tonnes in June, 41 tonnes in July, 2 tonnes in August and nil in September. The decline in country’s gold imports in August and September months was mainly due to the steps taken by the government and the Reserve Bank of India.

India is the world largest consumer of the gold and country’s total yellow metal consumption is around 900 tonnes a year, of which 600 tonnes goes into manufacturing and 300 tonnes into investments. Rising gold imports has become a cause of concern for the country as it’s the second largest contributor to the widening current account deficit (CAD) of the country. India, battling with record trade deficit and weak currency, is trying to curb imports of dollar-denominated gold, most expensive non-essential item in its import bill. Recently, the government has hiked gold imports rates to 15% and central bank introduced 80/20 rule under which 20% of all gold imports has to be re-exported.

Meanwhile, in order to boost Indian gems and jewellary industry growth, GTF has proposed Rashtriya Swarna Nivesh scheme, an initiative which is expected to bring the idle gold back into circulation and the association is hopeful of receiving RBI and SEBI approval soon. As per the proposed scheme, GTF hopes to collect 400 tonnes of gold in FY’14. 

The CNX Nifty is currently trading at 5,845.15 down by 62.15 points or 1.05% after trading in a range of 5,895.25 and 5,825.85. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were HCL Tech up by 2.39%, Ranbaxy up by 2.17%, Tata Steel up by 1.99%, Lupin up by 1.63% and Hindalco up by 1.57%. On the flip side, ICICI down by 3.38%, Coal India down by 3.34%, HDFC Bank down by 2.86%, Axis bank down by 2.52% and NMDC down by 2.38% were the major losers on the index.

The Asian equity indices were trading in red; Jakarta Composite down by 0.14%, Seoul Composite down by 0.13, Hang Seng down by 0.54%, Straits Times down by 0.02%, Nikki 225 down by 1.22%, KLSE Composite down by 0.02%, Taiwan Weighted down by 0.37%.