Benchmarks add losses; Nifty slips below 6,150 mark

Indian equities added losses to continue weak trade in red in the late afternoon session on account of selling in front line counters and taking cues from weak global cues. The selling got intensified after India Ratings and Research stated that the economy would grow 4.9% in the current financial year despite favourable monsoon brightening the scope for agriculture performance. Traders were seen selling in Realty, Power and Auto sector stocks. Hectic activity was witnessed in PSU banks on reports that the government will infuse money in the public sector banks via a qualified institutional placement. The banking secretary added that additional capital infusion will take place by March, based on the banks performance. Finance Minister P Chidambaram yesterday asked the Public Sector Banks to focus on the top 30 defaulters while terming the sharp rise in gross non- performing assets as unacceptable. In scrip specific development, Wipro was trading in red as the company has been a laggard in terms of revenue growth among the top four IT companies. The company’s consolidated net profit grew 28 percent year-on-year to Rs 1,932 crore and revenues jumped 19 percent on yearly basis to Rs 10,992 crore for the quarter ended September 2013. GAIL (India) was trading in green on reports that the oil ministry has decided to exempt the company from having to compensate state fuel retailers for selling diesel, kerosene and cooking gas below market rates.

On the global front, most of the Asian markets were trading in red barring Jakarta Composite and KLSE Composite while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,150 and 20,700 levels respectively. The market breadth on BSE was negative in the ratio of 966:1294 while 156 scrips remained unchanged.  

The BSE Sensex is currently trading at 20621.45, down by 243.52 points or 1.17% after trading in a range of 20922.32 and 20589.72. There were only 5 stocks advancing against 25 declines on the index.

The broader indices too succumbed to selling pressure; the BSE Mid cap and Small cap indices were trading lower by 0.56% and 0.62% respectively.

The top losing sectoral indices on the BSE were Realty down by 2.72%, Power down by 2.10%, Auto down by 1.78%, Oil & Gas down by 1.51% and Health Care down by 1.35% while there were no gainers.

The top gainers on the Sensex were Gail India up by 3.21%, Cipla up by 1.70%, SBI up by 1.24%, Hindustan Unilever up by 0.96% and ICICI Bank up by 0.16%. On the flip side, Wipro down by 4.21%, NTPC down by 3.17%, Bajaj Auto down by 3.15%, Sun Pharma down by 2.77% and BHEL down by 2.51%were the major losers on the Sensex.

Meanwhile, Finance minister P Chidambaram, after reviewing the performance of public sector banks, has allowed the government to infuse the budgeted Rs 14,000 crore of bank capitalization through preferential allotment. However, the minister ruled out the possibility of the government diluting its shareholding in the state-run banks.

This development is complete contradiction to Reserve Bank of India’s suggestion of government diluting ownership in Public State Banks even below 51% as an option for raising funds and easing fiscal burden, with government maintaining of keeping its stake in state-run banks at 58%.

Further, the minister has left it on the bank’s board to decide upon the issue of raising capital from the markets through qualified institutional placement (QIP) or other routes, which would be in addition to the capital infusion by the government. This development comes on the heels of the country's biggest lender, State Bank of India mulling raising 8,000 crore through the QIP route. The bank, in which government holds 62.31% stake, is expected to take a call on this within a month.

The government infused Rs 12,517 crore into 13 PSBs in 2012-13. It had infused about Rs 20,117 crore in PSBs during 2010-11, and Rs 12,000 crore in 2011-12.

The CNX Nifty is currently trading at 6,124.25, down by 78.55 points or 1.27% after trading in a range of 6,217.95 and 6,116.60. There were 7 stocks advancing against 43 declines on the index.

The top gainers of the Nifty were GAIL India up by 3.00%, Bank of Baroda up by 2.46%, Cipla up by 1.71%, NMDC up by 1.49% and SBI up by 1.34%. On the flip side, DLF down by 4.87%, JP Associates down by 4.62%, Cairn India down by 4.22%, Wipro down by 4.16% and NTPC down by 3.39% were the major losers on the index.

Majority of the Asian equity indices were trading in red; Shanghai Composite plunged by 1.25%, Hang Seng lost 1.36%, Nikkei 225 slumped by 1.95%, Seoul Composite declined 0.99%, Straits Times dropped 0.27% and Taiwan Weighted was down by 0.29%. On the flip side, Jakarta Composite surged by 1.03% and KLSE Composite added 0.58%.

The European markets were trading in red; France’s CAC 40 was down 0.60%, Germany’s DAX lost 0.48% and UK’s FTSE 100 dropped 0.45%.