Benchmark trim losses; trade continues in red

Indian equities trimmed losses but continued to trade in red in the late afternoon session in absence of buying in frontline counters. The sentiments were on pessimistic note despite reports showed that the country’s economic growth likely picked up slightly in the July-September quarter as improved manufacturing activity steered it from a four-year low in the previous three months. Traders were seen piling position in Power, Capital Goods and Auto stocks while selling was witnessed in Bankex, PSU and FMCG sector stocks. In scrip specific development, IDBI Bank was trading in red after global ratings firm Standard & Poor’s (S&P) downgraded the company’s foreign currency issuer credit rating on the back of weak asset quality. Redington (India) was trading in green on reports that the company will sell non-banking finance arm Easyaccess Financial Services to its promoter Harrow Investment Holding in a transaction that could fetch it up to Rs 288 crore. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. November 2013 series to next month i.e. December 2013 series. The near month November 2013 derivatives contract expires on Thursday i.e. November 28, 2013.

On the global front, most of the Asian markets were trading in red while the European markets were trading on mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,100 and 20,600 levels respectively. The market breadth on BSE was positive in the ratio of 1268:994 while 158 scrips remained unchanged.

The BSE Sensex is currently trading at 20524.71, down by 80.37 points or 0.39% after trading in a range of 20,604.27 and 20,456.53. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading too in red; the BSE Mid cap and Small cap indices were trading down by 0.04% and 0.21% respectively.

The gaining sectoral indices on the BSE were Power up by 1.08%, Capital Goods up by 1.03% and Auto up by 0.19% while, Bankex down by 0.75%, PSU down by 0.69%, FMCG down by 0.60%, Oil & Gas down by 0.47% and Realty down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 4.65%, HUL up by 2.17%, SSLT up by 1.75%, Hindalco Industries up by 1.48% and Hero MotoCorp up by 0.80%. On the flip side, Coal India down by 1.93%, Dr. Reddy’s Lab down by 1.49%, HDFC down by 1.39%, Tata Steel down by 1.38% and ITC down by 1.31%.

Meanwhile, Rafeeque Ahmed, the president of the Federation of Indian Export Organizations (FIEO), has said that high export orientated sectors may soon get the priority sector lending status from the lenders. The FIEO’s president has added that they have requested the government to fix at least 5% in the current priority sector cap of 40% for exports and the discussions between the finance ministry and Reserve Bank of India (RBI) on the issue are now at an advanced stage. 

The FIEO’s move is aimed to ensure credit flows to the exports sector by compelling banks to lend to exporters with priority sector lending status. Furthermore, a high-level committee of exporters led by FIEO is planning to meet the RBI Governor this month-end to discuss the priority sector lending issue. Indian exports increased by double-digit growth at 13.47% for the fourth consecutive month to $27.27 billion in October on the back reviving demand in the US and European markets. Further, emerging markets such as Latin America and others are also providing big opportunities for country’s exports. The depreciation in rupee value has improved competitiveness of domestic exporters.

Rafeeque Ahmed said the Indian merchandise exports during the second half were expected to see a growth of 12-15%. Meanwhile, the government has set a target of $325 billion exports for current fiscal. Increasing exports of the country also has also augmented expectations for a significant curtailing for India’s current account deficit (CAD), a major macro-economic problem that has created huge volatility in the domestic equities markets and currency.

The CNX Nifty is currently trading at 6,087.95, down by 27.40 points or 0.45% after trading in a range of 6,112.70 and 6,069.80. There were 20 stocks advancing against 30 declining on the index.

The top gainers of the Nifty were BHEL up by 4.78%, HUL up by 2.24%, Lupin up by 1.87%, SSLT up by 1.80% and Hindalco Industries up by 1.57%. On the flip side, BPCL down by 3.45%, NMDC down by 2.25%, Coal India down 1.96%, Bank of Baroda down by 1.94% and Dr. Reddy’s Lab down by 1.58% were the major losers on the index.

The Asian equity indices were trading mostly in red; Hang Seng down by 0.01%, Nikkei 225 down by 0.67%, Shanghai Composite down by 0.14%, Jakarta Composite down by 1.50% and Straits Times down by 0.09%.

On the other hand, Taiwan Weighted up by 0.74%, Seoul Composite up by 0.33%, KLSE Composite up by 0.22%.

The European markets were trading mostly mixed; France’s CAC 40 was down 0.12%, Germany’s DAX added 0.10% and UK’s FTSE 100 edged lower 0.04%.