Benchmarks trade in negative territory; IT, TECK drag

Indian equities pared gains to continue weak trade in the late afternoon session on account of selling in front line counters and while taking cues from European counterparts. The market sentiments were on pessimistic note from the early trade after World Bank revised India’s economic growth forecast downwards for the current financial year to 4.7% from 6.1% projected in April, citing two consecutive months of negative business sentiment and higher interest rates. Traders were seen piling positions in Oil & Gas, FMCG and Consumer Durables stocks while selling was witnessed in IT, TECK and Capital Goods sector stocks. In scrip specific development, Bajaj Holdings & Investment was trading in green after consolidated net profit rose 17.8% to Rs 459.98 crore on 0.5% growth in total income to Rs 92.26 crore in Q2 September 2013 over Q2 September 2012. Axis Bank was trading in green after the bank reported net profit surging 21.2% -- stronger-than-expected -- year-on-year to Rs 1,362.3 crore in September quarter. ONGC was trading firm after reports indicated that the company has found rich reserves in KG basin block with reserves seen at 100mt, which is four times higher than estimates.

On the global front, all the Asian markets were trading in green barring Shanghai Composite and Hang Seng while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,100 and 20,500 levels respectively. The market breadth on BSE was negative in the ratio of 1103:1137 while 150 scrips remained unchanged.  

The BSE Sensex is currently trading at 20427.93, down by 119.69 points or 0.58% after trading in a range of 20,629.80 and 20,404.16. There were only 12 stocks advancing against 18 declines on the index.

The broader indices continued to trade on a mixed note; the BSE Mid Cap was up 0.09% and Small Cap was trading down by 0.02%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.40%, FMCG up by 1.24%, Consumer Durables up by 0.35% and PSU up by 0.08%. While, IT down by 3.52%, TECK down by 2.63%, Capital Goods down by 2.01%, Auto down by 1.11% and Realty down by 0.92% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.55%, ONGC up by 2.46%, Bharti Airtel up by 2.34%, ITC up by 1.71% and RIL up by 1.48%. On the flip side, TCS down by 4.65%, Tata Motors down by 4.39%, L&T down by 3.15%, Infosys down by 2.33% and Wipro down by 2.33% were the top losers on the Sensex.

Meanwhile, with an aim to contain the fiscal deficit at 4.8 percent of GDP in the current financial year, Finance Ministry may seek higher dividend payments from state-owned companies in sectors such as steel, coal, mines and power. The move will help the government to contain the fiscal deficit within the target limit by making up part of the shortfall from disinvestment and lower revenue receipts on account of slowing economic growth. So far this fiscal, the government has raised only Rs 1,400 crore against the set disinvestment target of Rs 40,000 crore.

Finance Minister P Chidambaram will meet the chiefs of public sector units (PSUs) soon and will discuss various issues, including dividend payment and investment of surplus funds. Meanwhile, the government has already asked the PSUs to invest their surpluses funds or give special dividend. Recently, Chidambaram has said that the government is committed to the path of fiscal consolidation and will take difficult decisions soon to check country’s widening deficits. The government has set target to contain fiscal deficit at 4.8 percent of GDP in the current financial year.

Country’s fiscal deficit has touched around three-fourths of the budget estimate in the first five months of the fiscal. Meanwhile, the government is taking measures to check fiscal deficit. Recently, it has announced a slew of austerity measures including banning government departments for holding meetings in 5-star hotels among others to cut spending in non-critical areas.

The CNX Nifty is currently trading at 6,051.80, down by 37.25 points or 0.61% after trading in a range of 6,110.75 and 6,040.65. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were JP Associate up by 7.07%, Bajaj Auto up by 2.54%, ONGC up by 2.45%, Bharti AIrtel up by 2.39% and ITC up by 1.72%. On the flip side, HCL Technologies down by 6.29%, TCS down by 4.48%, Tata Motors down by 4.22%, IndusInd Bank down by 3.94% and Bank of Baroda down by 3.49% were the major losers on the index.

The Asian equity indices were mostly trading in green; Jakarta Composite up by 0.57%, Taiwan Weighted up by 0.51%, Seoul Composite up by 0.29%, Nikkei 225 up by 0.83%, KLSE Composite up by 0.34% and Straits Times up by 0.43% while, Shanghai Composite down by 0.21% and Hang Seng down by 0.57% were the only losers.

The European markets were trading in red; France’s CAC 40 was down 0.66%, Germany’s DAX lost 0.59% and UK’s FTSE 100 dropped 0.33%.