Benchmarks languish near day’s lowest point; Sensex slips below 20,500 level

In absence of any buying activity after a sharp up-move in previous session, Indian equity markets persistently losing ground are languishing near day’s lowest point with a cut of over half a percent, below psychological 20,500 (Sensex) and 6,100 (Nifty) levels respectively.

Reluctance of investors to add position ahead of F&O expiry on Thursday amidst subdued global-set up, are mainly acting as negative forces behind the drubbing of local equity markets. While, frontline indices have slipped in red, broader indices are just about managing to hold their neck above water in green terrain. Sectorally, Fast Moving Consumer Goods, Information Technology and Auto counters are dictating the downtrend of the markets, while Capital Goods, Consumer Durables and Power pivotals are barring the negative trend.

Additionally, Public Sector Oil Marketing Companies, viz, BPCL, HPCL and IOC, etc also slipped in red on account of profit-booking as traders questioned how quickly the Iranian nuclear accord could translate into higher supplies. Besides, sugar stocks, like Bajaj Hindusthan, Shree Renuka Sugar were trading lower on profit booking. An all-party delegation from Maharashtra, along with the representatives of agitating farmers organizations, is scheduled to meet Prime Minister Manmohan Singh on  Tuesday about various demands of the sugar industry. The overall market breadth on BSE  was in the favour of declines which thumped advances in the ratio of 1026:920; while 144 shares remained unchanged.

The BSE Sensex is currently trading at 20497.27, down by 107.81 points or 0.52% after trading in a range of 20,604.27 and 20,48350. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were just about managing to hold their neck in green; the BSE Mid cap and Small cap indices were trading up by 0.06% and 0.03% respectively.

The gaining sectoral indices on the BSE were Capital Goods up by 0.76%, Consumer Durables up by 0.62%, Power up by 0.36%. While, FMCG and IT down by 0.70%, Teck down by 0.65%, Auto down by 0.58%, and PSU down by 0.46%, were losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.85%, SSLT up by 1.35%, HUL up by 1.24%, Hindalco Inds up by 1.10%, and Sun Pharma up by 0.78%. On the flip side, ITC down by 1.63%, Tata Steel down by 1.53%, Tata Motors down by 1.49%, Dr Reddy’s Lab down by 1.43%, and Wipro down by 1.33%.

Meanwhile, in an apparent bid to soothe the inflation-ravaged common man, the Reserve Bank of India (RBI) is planning to launch CPI-indexed bonds aimed at protecting the savings of retail investors from the impact of price rise by the end of next month, i.e., December.

The apex bank had earlier come up with debt instrument, which were linked to the wholesale price index (WPI). However, with retail inflation returning to double digit after a span of seven months, this may be the right time to roll out CPI indexed bonds. On the macro-front, in a recipe of another rate hike, the provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) for October 2013 on point to point basis (October 2013 over October 2012) accelerated to 10.09%, higher than expectation of over 10% and also higher as compared to 9.84% for the previous month of September 2013. The corresponding provisional inflation rates for rural and urban areas for October 2013 stood at 10.11% and 10.20% respectively, compared to 9.71% and 9.93% respectively in September. 

Further, this move does not come as surprise because RBI in its previous policy statement underscored that it would soon launch inflation indexed securities for retail investors of 10 year tenure which would be linked to the new CPI (combined). There it mentioned that the interest rate would be compounded half yearly and will be paid cumulatively on redemption.

Additionally, the government had also announced plans to issue Rs 12,000-15,000 crore of inflation-indexed bonds with 10-year maturity in tranches during the current financial year. The bonds, which are part of the government’s borrowing programme are also aimed to dissuade investors from buying gold. Further while, the first series of bonds was open to all categories of investors, the second series will be exclusively for retail investors. 

The CNX Nifty is currently trading at 6,079.50, down by 35.85 points or 0.59% after trading in a range of 6,112.70 and 6,079.40. There were 13 stocks advancing against 37 declining on the index.

The top gainers of the Nifty were BHEL up by 3.95%, Hindalco Inds up by 1.47%, SSLT up by 1.32%, and Sun pharma up by 0.65%. On the flip side, Tata Motors down by 1.84%, ITC and Tata Steel down by 1.77%, BPCL down by 1.70% and Asian Paints down by 1.61% were the major losers on the index.

The Asian equity indices were trading mixed; Taiwan Weighted up by 0.74%, Hang Seng up by 0.12%, Seoul Composite up by 0.33%, KLSE Composite up by 0.14%. While, Nikkei 225 down by 0.67%, Shanghai Composite down by 0.09%, Jakarta Composite down by 1.02%, and Straits Times down by 0.13%.