Nifty down 1%; German Chancellor’s comments weigh sentiments

The key benchmarks gave up their yesterday’s gains, falling about a percentage point in early trade following weak global cues. German Chancellor Angela Merkel’s comments that ‘Euro bonds are not needed and not appropriate,’ triggered a wave of negative sentiments. She also ruled out an expanded role for the European Central Bank in fighting the debt crisis. Moreover, Asian markets exhibiting gloomy trend at this point of time. Back home, market witnessed bloodbath in early trade with Sensex hovering near its crucial 15,700 mark. The broader indices were too trading in the red while, the market breadth on the BSE was negative; there were 572 shares on the gaining side against 703 shares on the losing side while 55 shares remained unchanged. Meanwhile, data showing heavy selling by foreign funds recently hit investor sentiment adversely. FIIs sold shares worth a massive Rs 1636.08 crore in a single trading session on November 24, 2011. Bucking the trend, shares of Pantaloon Retail, Shoppers Stop, Vishal Retail, Koutons, Trent and CESC rallied 10-20%, as the government on Thursday allowed 51% foreign direct investment (FDI) in multi-brand retail as well as 100% FDI in single brand retail. The cabinet also cleared the new companies’ bill that is aimed at overhauling corporate governance norms and that too will make impact on the markets.

The BSE Sensex opened at 15,781.25; about 77 points lower compared to its previous closing of 15,858.49, and has touched a low of 15,673.66 while high remained its opening.

The index is currently trading at 15,703.09, down by 155.40 points or 0.98%. There were 5 stocks advancing against 25 declines on the index.

The overall market breadth has made a negative start with 43.01% stocks advancing against 52.86% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices dipped 0.10% and 0.14% respectively.

The top losing sectoral indices on the BSE were, Metal down by 1.52%, Oil and Gas down by 1.38%, IT down by 1.35%, Bankex down by 1.22% and TECk was down by 1.05%. While, CG up by 0.06% remained the lone gainer on the index.

The top gainers on the Sensex were BHEL up by 0.82%, Cipla up by 0.46%, M&M up by 0.30%, L&T up by 0.15% and IT was up by 0.13%.

On the flip side, Jindal Steel was down by 2.77%, Hero MotoCorp was down by 2.66%, Tata Steel was down by 2.45%, HDFC Bank was down by 1.91% and Jaiprakash Associates was down by 1.87% were the top losers on the Sensex.

Meanwhile, despite deteriorating financial health of government-owned oil marketing companies (OMCs), Petroleum Minister, S. Jaipal Reddy, indicated that the Government will not rush into raising retail fuel prices, even though a falling rupee has increased the cost of oil imports. “Depreciation of rupee has naturally created unprecedented problems. This will lead to under-recoveries (revenue loss) of more than Rs 1,32,000 crore (in FY 2011),” said Reddy.

The OMCs are incurring revenue loss because of the high crude oil prices and recent decline in Indian rupee. “We are waiting for the situation to evolve. Therefore, we would like to wait and watch before I can take a view,” Reddy said.

Rupee devalued from Rs 45.58 per American dollar in the last few months to Rs 52.35 on November 23, after touching all time low on November 22 (Rs 52.73). This decline in rupee has increased the cost of imports especially oil, country meets around 79% of its oil needs via imports. The OMCs had earlier this month raised petrol price by Rs 1.8 a litre because of the fall in rupee, however, cut the rates by Rs 2.22 a litre from November 15 after decline in crude oil prices.

Currently, OMCs lose around Rs 10.17 a litre on diesel, Rs 25.66 per litre on kerosene and Rs 260.50 per domestic LPG cylinder. However Reddy said that no meeting of a high-powered ministerial panel has been called to decide on revising the rates. “No decision has been taken to convene the meeting of the Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee to look at the prices of such sensitive products as LPG, kerosene and diesel,” he said.

The S&P CNX Nifty opened at 4,731.30; about 25 points lower compared to its previous closing of 4,756.45, and has touched a low of 4,701.45 while high remained its opening.

The index is currently trading at 4,709.25, higher by 47.20 points or 0.99%. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 1.83%, Cipla up by 0.75%, BHEL up by 0.38%, L&T up by 0.37% and M&M up by 0.35%.

On the flip side, Jindal Steel down by 2.69%, Tata Steel down by 2.66%, Hero MotoCorp down by 2.37%, Sesa Goa down by 2.10% and IDFC down by 2.06%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 8.69 points or 0.36% to 2,388.86, Hang Seng was down 230.56 points or 1.29% to 17,704.54, Jakarta Composite was down 64.43 points or 1.74% to 3,631.60, KLSE Composite was down 13.16 points or 0.91% to 1,434.83, Straits Times was down 28.12 points or 1.05% to 2,649.03, Seoul Composite was down 24.39 points or 1.36% to 1,770.67 and Taiwan Weighted was down by 106.15 points or 1.55% to 6,758.24.

On the flip side, Nikkei 225 was up by 0.72 points or 0.01% to 8,165.90.