Benchmarks add losses; FMCG, Healthcare drag

Indian equities added losses to continue weak trade in the late afternoon session on account of selling in frontline counters, taking cues from European counterparts. The market took note of HSBC Services Purchasing Managers' Index (PMI) data, compiled by Markit, which recovered from four years low at 47.1 in October against 44.6 in September. The data was below the 50.0 no-change mark for the fourth successive month in October, indicating a further contraction. Traders were seen piling positions in Realty, PSU and Metal stocks while selling was witnessed in FMCG, Health Care and IT sector stocks. In scrip specific development, hectic activity was witnessed in UB Group companies like United Breweries (Holdings), United Breweries and Kingfisher Airlines on reports that liquor baron Vijay Mallya’s sprawling villa in Goa is once again caught in a tug-of-war between creditors and his now-defunct Kingfisher Airlines. Shree Renuka Sugars was trading in green on reports that Singapore-based agri-business group Wilmar is eying stake in the sugar refiner company.

On the global front, most of the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,300 and 21,100 levels respectively. The market breadth on BSE was positive in the ratio of 1166:1027 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 21033.89, down by 205.47 points or 0.97% after trading in a range of 21,158.56 and 21000.29. There were 9 stocks advancing against 20 declines while 1 stock remained unchanged on the index.

The broader indices continued to outperform larger peers by fat margins; the BSE Mid cap index was up by 1.06%, Small cap index gained 0.72%.

The gaining sectoral indices on the BSE were Realty up by 1.17%, PSU up by 0.74%, Metal up 0.63%, Power up by 0.35% and Auto up by 0.04%. While, FMCG down by 2.37%, Health Care down by 1.42%, IT down 1.09%, TECK down by 1.06% and Consumer Durables down by 0.98% were losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.57%, Tata Motors up by 1.39%, Hindalco Industries up by 1.21%, Tata Steel up by 0.99% and Tata Power up by 0.66%. On the flip side, ITC down by 3.40%, Sun Pharma down by 3.00%, Dr. Reddy’s Lab down by 2.73%, ICICI Bank down by 2.35% and TCS down by 2.05% were the top losers on the Sensex.

Meanwhile, foreign direct investment (FDI) into the country’s services sector has declined by 47.5 percent to $1.19 billion during the April-August period of 2013 as compared to $ 2.28 billion in the same period last year mainly due to the declined outsourcing business of India on the back of the various restrictions put by developed economies.  Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represent around 60% share in the country’s GDP. During the 2012-13, foreign investment in the segment fell by 7 percent to $ 4.83 billion from $5.21 billion in 2011-12.

In spite of the government various efforts to increase FDI, during April-August, 2013 has declined, reflecting the need to take more steps to improve the business environment in the country. Overall, FDI during the April-August period of 2013-14 has grown by a marginal 4 percent to $8.46 billion, from $8.16 billion in the first five months of 2012-13.

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. Recently, the government has also started exercise in allowing FDI in railways sector besides liberalising FDI norms for construction and housing sector. It is also considering raising the FDI cap in the insurance sector to 49 percent from 26 percent. Meanwhile, India needs around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The CNX Nifty is currently trading at 6,269.00, down by 48.35 points or 0.77% after trading in a range of 6,304.75 and 6,247.55. There were 20 stocks advancing against 30 declining on the index.

The top gainers of the Nifty were BPCL up 3.46%, DLF up by 3.37%, NMDC up 3.09%, JP Associates up 2.57% and PNB up by 2.21%. On the flip side, ITC down by 3.43%, Power Grid down by 3.35%, Sun Pharma down by 3.07%, Ranbaxy Laboratories down by 2.62% and Dr. Reddy’s Lab down by 2.61% were the major loser on the index.

The Asian equity indices were trading mostly in red barring Shanghai Composite up by 0.35%, Straits Times up by 0.01% and Nikkei 225 up by 0.17%. While, Seoul Composite down by 0.56%, KLSE Composite down by 0.16%, Hang Seng down by 0.65%, Jakarta Composite down by 0.21% and Taiwan Weighted down by 1.10%.

The European markets were trading in red; France’s CAC 40 was down 0.23%, Germany’s DAX lost 0.10% and UK’s FTSE 100 dropped 0.05%.