Markets suffer sharp profit booking on Tuesday morning

The Indian markets are showing sharp downslide on Tuesday morning, paring their gains what they have gathered in run-up to Diwali and on Muhurat session. Traders are a bit cautious and are opting to book profit from the recent rallies, taking cues from the weakness in the regional markets. Also, there was concern of US Fed going for a tapering sooner than expected, as more positive economic data from the country were reported on Monday. On the domestic front there was concern with the report that foreign direct investment (FDI) inflow into the services sector, which contributes over 60 percent to GDP, declined by 47.5 percent to $1.19 billion during April-August. Overall, during the April-August period, FDI grew by 4 percent to $8.46 billion, from $8.16 billion in the same period last fiscal year. The textile stocks too were in somber mood despite a report that India has clawed back into the list of top three apparel and textile exporters to the key US market during the first seven months of 2013. PSU oil marketing companies too were suffering some profit booking after Oil Minister M Veerappa Moily allowed the sale of 5-kg cooking gas (LPG) cylinders at petrol pumps across the country, earlier petrol pumps owned and operated by oil companies in Delhi, Mumbai, Kolkata, Chennai and Bengal were allowed to sell the 5-kg cylinders.

Back on street, the broader markets that have outperformed the benchmarks on the Diwali session, too were trading lower with cut of around a quarter percent, while on the sectoral front, barring oil & gas all other indices were trading in red with FMCG, consumer durables, power and tech trading lower by over a percent.

The market breadth on the BSE was negative; there were 461 shares on the gaining side against 745 shares on the losing side while 52 shares remain unchanged.

The BSE Sensex opened at 21134.10; about 105 points lower compared to its previous closing of 21239.36, and has touched a high and a low of 21158.56 and 21009.29 respectively. The index is currently trading at 21017.09, down by 222.27 points or 1.05%. There were 5 stocks advancing against 25 declines on the index.

The overall market breadth has made a weak start with 36.65% stocks advancing against 59.22% declines. The broader indices were trading in red; the BSE Mid cap and Small cap indices were down by 0.49% and 0.23% respectively. 

The top losing sectoral indices on the BSE were, FMCG down by 1.83%, Power down by 1.55%, Consumer Durables down by 1.45%, Teck down by 1.38% and IT down by 1.29%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were HDFC up by 0.81%, Tata Motors up by 0.80%, RIL up by 0.78%, HDFC Bank up by 0.07% and Coal India up by 0.02%. On the flip side, BHEL was down by 2.32%, ITC was down by 2.30%, SSLT was down by 2.29%, TCS was down by 2.16% and SBI was down by 2.12% were the top losers on the Sensex.

Meanwhile, Indian manufacturing activity stuck to its declining trajectory for third consecutive month in October as order books shrank at quicker space. The HSBC Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, stood unchanged at September’s 49.6 points. Albeit marginal, successive deterioration of business conditions across India, indicate continued contraction in the sector as a reading above 50 indicates growth and below that depicts contraction. Slowdown in manufacturing sector activities and declined new business orders underscores the prolonged period of slowdown in Asia’s economy, despite mark up in overseas demand which prompted firms to hire more workers.

The new orders sub-index fell to 48.9 in October as against 49.6 in September, remaining below watershed 50 for the fifth consecutive month. Order flows remained weak, despite a bounce-back in export orders. Encouragingly, export business expanded for the first time in three months during October on the back of weaker Rupee. However, the overall pace of growth was, however, moderate and weaker than the series average.

Further, latest data highlighted consumer goods as the best performing sector in October, with production, new orders and export business all rising. Conversely, intermediate goods was the worst performing category. Stronger new order flows at consumer goods manufacturers led firms to recruit additional workers in October. However, with investment and intermediate goods firms indicating job shedding, the overall rate of employment growth across the Indian manufacturing sector as a whole was marginal.

Thus, the latest survey suggests that India’s Apex Bank has to continue its staring contest with inflation, given that input cost inflation rising to a 16-month peak has forced firms to lift output prices to protect margins.

The CNX Nifty opened at 6,282.15; about 35 points lower as compared to its previous closing of 6,317.35, and has touched a high and a low of 6,293.75 and 6,257.45 respectively.

The index is currently trading at 6,264.45, down by 52.90 points or 0.84 %. There were 9 stocks advancing against 40 declines, while one stock remains unchanged on the index.

The top gainers of the Nifty were NMDC up by 2.27%, Reliance Industries up by 1.11%, Tata Motors up by 0.72%, IndusInd Bank up by 0.71% and PNB up by 0.63%. On the flip side, ITC down by 2.45%, BHEL down by 2.14%, Power Grid down by 2.13%, Dr. Reddy's Laboratories down by 2.07% and Ranbaxy down by 2.02% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite was down by 12.85 points or 0.60% to 2,136.78, Hang Seng slumped by 171.68 points or 0.74% to 23,017.94, KLSE Composite was down by 2.94 points or 0.16% to 1,807.47, Nikkei 225 shed 22.31 points or 0.16% to 14,179.26, Seoul Composite was down by 10.10 points or 0.50% to 2,015.16 and Taiwan Weighted lost 54.76 points or 0.66% to 8,299.38.

On the other hand, Straits Times was the lone gainer in the Asian pack, up by 7.85 points or 0.25% to 3,211.75.