Markets trade lower in opening deals on weak global cues

Indian equity benchmarks, snapping three days winning streak, are trading slightly lower in early deals on Tuesday tracking negative global cues. Most of the Asian equity benchmarks were trading lower at this point of time as investors remained cautious, tracking negative cues from Wall Street overnight, as better than economic reports raised speculation the Federal Reserve will soon tighten its monetary policy. Meanwhile, Shanghai Composite edged lower on expectations that China will restart initial public offerings in the new year, raising fears of a share glut.

Back home, sentiments also remained dampened after the output of eight core sector industries contracted by 0.6 percent in October due to poor showing by coal, oil and gas sectors. The output of eight infrastructure industries in April-October was a mere 2.6 percent against 6.8 percent in the same period of the last fiscal. Meanwhile, stocks related to Auto space witnessed selling as after showing some signs of revival in September and October during the festive season, auto sales dipped again in November.

However, losses remain capped as some support came in from good economic data of trade deficit. India’s current-account deficit shrank to a four-year low to $5.2 billion or 1.2% of gross domestic product (GDP), in the September quarter, sharply lower from the $21 billion deficit recorded a year ago period. Meanwhile, Finance minister P Chidambaram has said that the economy is expected to grow by 5% in 2013-14 and the fiscal and current account deficits would be contained.

On the sectoral front, metal witnessed the maximum gain in trade followed by capital goods and software, while fast moving consumer goods, banking and realty remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 718 shares on the gaining side against 497 shares on the losing side while 57 shares remain unchanged.

The BSE Sensex opened at 20857.85; about 40 point lower compared to its previous closing of 20898.01, and has touched a high and a low of 20907.39 and 20826.73 respectively. The index is currently trading at 20890.60, down by 7.41points or 0.04%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth has made a strong start with 56.28% stocks advancing against 39.29% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices were up by up by 0.42% and 0.39% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 0.91%, Capital Goods up by 0.90%, IT up by 0.39%, Teck up by 0.30% and Power up by 0.19%, while FMCG down by 0.42%, Bankex down by 0.36%, Auto down by 0.32%, Realty down by 0.29% and Consumer Durables down by 0.12% were the top losers on the sectoral index.

The top gainers on the Sensex were Jindal Steel up by 3.63%, Hindalco Industries up by 2.91%, Gail India up by 1.83%, BHEL up by 1.22% and SSLT up by 0.98%. On the flip side, HDFC was down by 0.85%, NTPC was down by 0.84%, Dr Reddys Lab was down by 0.82%, Mahindra & Mahindra was down by 0.76% and Bajaj Auto was down by 0.74% were the top losers on the Sensex.

Meanwhile, in order to boost the ailing Indian aviation sector and to make it more competitive on global front, the Competition Commission of India (CCI) has demanded easing norms for airlines flying abroad, saying that the norm is acting as an impediment for the growth of Indian aviation sector.

The CCI has said that the minimum eligibility criteria for Indian carriers to launch international services should be removed and added that the present aviation five year/20 aircraft rule has become a major hurdle for the sector, under which Indian carrier needs to have a fleet of 20 aircraft to launch international operations and to complete five years of flying in the domestic space in order to launch international airlines services. On the contrary, this restriction does not apply to foreign airlines.

Further, CCI is of the view that once this rule is relaxed, the contest ability of the domestic aviation sector is likely to increase and will make the Indian aviation sector more competitive on global level.  On the other hand, the abolition of minimum eligibility for international flying is first on the agenda of civil aviation ministry. However, the policy change will require the Cabinet’s approval. The abolition of international flying norm, creation of an aviation force and making Air Navigation Services a separate company are the three proposals to be cleared by the union cabinet before the Lok Sabha general elections scheduled to be held in 2014.

The CNX Nifty opened at 6,204.25; about 13 points lower as compared to its previous closing of 6,217.85, and has touched a high and a low of 6,215.95 and 6,194.25 respectively. The index is currently trading at 6,206.25, down by 11.60 points or 0.19%. There were 15 stocks advancing against 34 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Jindal Steel up by 3.73%, Hindalco Industries up by 2.26%, Gail up by 1.77%, Asian Paint up by 1.23% and TCS up by 1.04%. On the flip side, Kotak Bank down by 1.41%, JP Associate down by 1.20%, IndusInd Bank down by 1.07%, HCL Tech down by 0.98% and HDFC down by 0.97% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dipped 1.81 points or 0.08% to 2,205.56, Hang Seng declined 140.22 points or 0.58% to 23,898.33, Jakarta Composite dropped 21.56 points or 0.50% to 4,300.41, Straits Times decreased 0.20 points or 0.01% to 3,188.56, Seoul Composite shed 16.89 points or 0.83% to 2,013.89 and Taiwan Weighted was down by 2.83 points or 0.03% to 8,411.78.

On the flip side, KLSE Composite rose 9.56 points or 0.53% to 1,827.71 and Nikkei 225 was up by 102.84 points or 0.66% to 15,757.91.