Benchmarks trade lower on weak global cues

Prolonging their southward journey for second continuous day, Indian equity benchmarks are trading in the red in early deals with frontline gauges tumbling below their crucial 21,200 (Sensex) and 6,300 (Nifty) levels amid weak global cues. The US markets ended modestly lower overnight after a lackluster trade in last session, however, the selling remained subdued that capped the downside. All the Asian equity markets were trading in the red terrain at this point of time tracking weak cues from Wall Street. Meanwhile, Japanese market was trading lower as the Core machine orders despite gaining 0.6 percent in the month of October missed the forecast.

Back home, sentiments also remained dampened after the rupee snapped its five-day rising streak against the American currency and fell by 29 paise at 61.33 per dollar in early trades today at the Interbank Foreign Exchange market on fresh dollar demand by importers. Moreover, selling in Auto space too weighed down sentiments after car sales in India fell 8 percent to 1.42 lakh units in November from 1.55 lakh units a year ago, the second consecutive month of decline as demand fell after the festive season. Additionally, select power stocks struggling to get some traction after the central power regulator issued a new set of draft tariff guidelines for state-owned power utilities, wherein some of the operational norms have been tightened and the financial incentives for achieving transmission and generation targets have been sharply pruned. The new guidelines will be applicable for five years starting April 2014.

On the sectoral front, fast moving consumer goods witnessed the maximum gains in trade followed by power and consumer durables, while capital goods, banking and auto remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE was positive; there were 510 shares on the gaining side against 698 shares on the losing side while 68 shares remain unchanged.

The BSE Sensex opened at 21191.27; about 63 point lower compared to its previous closing of 21255.26, and has touched a high and a low of 21200.51 and 21110.96 respectively. The index is currently trading at 21152.84, down by 102.42 points or 0.48%. There were 9 stocks advancing against 21 declines on the index.

The overall market breadth has made a weak start with 39.97% stocks advancing against 54.70% declines. The broader indices were trading in red; the BSE Mid cap and Small cap indices down by 0.04% and 0.10% respectively. 

The top gaining sectoral indices on the BSE were, FMCG up by 0.68%, Power up by 0.28% and Consumer Durables up by 0.21%, while Capital Goods down by 1.17%, Bankex down by 1.03%, Auto down by 1.00%, Realty down by 0.71% and Oil & Gas down by 0.65% were the top losers on the sectoral index.

The top gainers on the Sensex were NTPC up by 2.50%, Jindal Steel up by 1.07%, ITC up by 0.93%, Hindustan Unilever up by 0.74% and Bajaj Auto up by 0.68%. On the flip side, Tata Motors was down by 2.43%, L&T was down by 1.61%, BHEL was down by 1.36%, ONGC was down by 1.19% and HDFC Bank was down by 1.07% were the top losers on the Sensex.

Meanwhile, giving some respite to Special Economic Zones (SEZs) struggling with global economic slowdown, the government has granted more time to some 115 SEZs developers to execute their projects during April 2012 and November 2013.  Earlier, SEZs developers had sought extension of validity period citing reasons like delay in approvals from statutory/state government bodies, adverse business climate because of global economic turmoil, delay in environmental clearance, lack of demand for space in SEZs and changed fiscal incentive regime.

The government has approved 576 such zones out of which 175 have commenced exports. Further, the exports from these zones stood at Rs 2.46 lakh crore during April- September this fiscal.  In 2012-13, it was Rs 4.76 lakh crore, which is about 30 per cent of the country's total exports. Among the total 175 SEZs operation in the country, a maximum of 40 are present in Andhra Pradesh followed by Tamil Nadu having 34, 22 in Karnatka and 20 in Maharashtra.

Over the past two years, investments in SEZs have reduced owing to the imposition of taxes and the requirements of certain clearances, denting the attractiveness of these units. Meanwhile, the government has started taking measure to ease SEZs norms, which will be helpful to enhance country’s industrial development and increase exports. In an attempt to revive investors’ interest in the zones, Commerce Ministry has recently slashed the minimum area requirement for setting up SEZs.

The CNX Nifty opened at 6,307.20; about 25 points lower as compared to its previous closing of 6,332.85, and has touched a high and a low of 6,313.25 and 6,289.35 respectively. The index is currently trading at 6,291.00, down by 41.85 points or 0.66%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were NTPC up by 2.32%, ITC up by 0.88%, Ranbaxy up by 0.78%, Lupin up by 0.77% and Hindustan Unilever up by 0.56%. On the flip side, Tata Motors down by 2.69%, IDFC down by 2.51%, DLF down by 2.34%, IndusInd Bank down by 2.12% and L&T down by 2.04% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite declined 25.61 points or 1.14% to 2,211.88, Hang Seng dropped 295.48 points or 1.24% to 23,448.71, Jakarta Composite dipped 10.04 points or 0.23% to 4,265.64, Nikkei 225 tumbled 214.80 points or 1.38% to 15,396.51, Straits Times shed 9.00 points or 0.29% to 3,072.72, KLSE Composite slipped 0.40 points or 0.02% to 1,843.45, Seoul Composite contracted 10.68 points or 0.54% to 1,982.77 and Taiwan Weighted was down by 20.77 points or 0.25% to 8,422.62.