Weak trade prevails; FMCG, Auto drag

Indian equities continued weak trade in red in the late afternoon session on account of selling in frontline counters. The sentiments turned soured after output of eight core industries declined by 0.6% in October due to fall in production of natural gas and coal in the country. Traders were seen piling position in Oil & Gas, Realty and Metal stocks while selling was witnessed in FMCG, Auto and Bankex sector stocks. In scrip specific development, Power Grid Corporation of India was trading in green as its follow-on public offer (FPO) commences today. Shree Renuka Sugars was trading firm on reports that the Karnataka-based sugar company is in advanced talks with Wilmar for stake sale that is likely to be announced by month-end. Eicher Motors was trading in green heading towards a seventh consecutive day of gains on speculation of increased buying from overseas investors. Reliance Communication was trading under pressure on reports that telecom company and its subsidiaries have come under service tax scanner.

On the global front, the Asian markets were trading on a mixed note while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,250 and 20,900 levels respectively. The market breadth on BSE was positive in the ratio of 1161:1148 while 159 scrips remained unchanged.

The BSE Sensex is currently trading at 20882.20, down by 15.81 points or 0.08% after trading in a range of 20,927.05 and 20,826.73. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indexes was up by 0.32% and 0.45% respectively.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.66%, Realty up by 0.65%, Metal up by 0.48%, Power up 0.31% and Capital Goods up by 0.27%. While, FMCG down by 0.62%, Auto down by 0.55%, Bankex down by 0.42%, PSU down by 0.17% and Health Care down by 0.12% were losing indices on BSE.

The top gainers on the Sensex were Jindal Steel up by 4.66%, BHEL up by 2.61%, Hindalco Industries up by 2.13%, Gail India up by 1.81% and Reliance Industries up by 1.13%. On the flip side, Dr. Reddy’s Lab down by 1.47%, M&M down by 1.26%, NTPC down by 1.19%, Coal India down by 1.13% and HDFC Bank down by 0.80%.

Meanwhile, encouraged over the better-than-expected growth in GDP and a significant contraction in country’s current account deficit (CAD), Finance Minister P Chidambaram expressed confidence that the economy would expand by 5 percent and CAD would remain below the set target of 3.7 percent of GDP in current financial year. The CAD narrowed sharply to $5.2 billion, or 1.2 percent of GDP, in the July-September quarter of this fiscal, while, Gross Domestic Product (GDP), a measure of the country's total economic output, grew by 4.8% for the reported quarter.

Hoping things will become better in the second half of the current fiscal, Chidambaram has said that Indian economy is passing through a ground of optimism and the government is looking forward to better performance in Q3 and Q4 as the recent improvement in some important sectors like manufacturing, better performance of exports as well as certain steps taken by the government will give boost to economic growth. Meanwhile, Government's forecast for economic growth is above the estimation of several global institutions including World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) that have projected growth rate of below 5 percent for 2013-14.

Furthermore, amid rising concerns over country’s widening fiscal deficit, which has already reached 84.4 percent for the full-year Budget estimates in the first seven months of 2013-14, Chidambaram said that the government will be able to achieve the disinvestment target of Rs 40,000 crore and contain the fiscal deficit within 4.8 percent of the GDP. However, during the first seven months, the government was able to garner only about Rs 1,150 crore through disinvestment.

The CNX Nifty is currently trading at 6,207.35, down by 10.50 points or 0.17% after trading in a range of 6,225.40 and 6,194.25. There were 23 stocks advancing against 27 declining on the index.

The top gainers of the Nifty were Jindal Steel up by 4.53%, BHEL up by 2.66%, Hindalco Industries up by 2.05%, Gail India up by 1.74% and NMDC up by 1.72%. On the flip side, HCL Technologies down 1.79%, Kotak Bank down by 1.63%, Dr. Reddy’s Lab down by 1.49%, M&M down by 1.43% and Coal India down by 1.37% were the major losers on the index.

The Asian equity indices were trading mixed; Nikkei 225 up by 0.60%, Straits Times up by 0.08%, KLSE Composite up by 0.30% and Shanghai Composite up by 0.69%. While, Jakarta Composite down by 0.70%, Taiwan Weighted down by 0.26%, Hang Seng down by 0.53% and Seoul Composite plunged by 1.05%.

The European markets were trading in red; France’s CAC 40 was down 0.62%, Germany’s DAX lost 0.04% and UK’s FTSE 100 slipped 0.16%.