Benchmarks end slightly in the red on disappointing WPI data

Indian equity benchmarks ended the Monday’s trading session slightly in the red, extending southward journey to fifth consecutive day, as investors remained sidelines ahead of Reserve Bank of India’s monetary policy and US Federal Reserve’s meeting outcome later this week for the further direction. Trade remained range-bound with frontline gauges altering between red and green throughout the day. Sentiments remained dampened on report that foreign institutional investors (FIIs) sold shares worth a net Rs 432.02 crore on December 13, 2013. Some cautiousness also crept-in as the foreign direct investment (FDI) inflows into the services sector declined by about 62 percent year-on-year to $1.36 billion during April-October of the ongoing fiscal.

Selling got intensified after India’s main inflation gauge, based on monthly WPI, accelerated to highest level since September 2012 at 7.52% for the month of November as against eight month high figure of 7.00% (Provisional) for the previous month of October and 7.24% during the corresponding month in the previous year, mainly driven by food price inflation which rose at the fastest clip since June 2010.

However, the losses remained capped on report that the government has put on the fast track projects worth Rs 34,647 crore in petroleum and natural gas and power sectors by approving a number of them and giving directions for urgent clearances to the rest. Some support also came in from currency front as Indian rupee, after subdued opening, gained strength and were trading below 62 per dollar mark at the time of equity markets closing.

Positive opening in European markets too supported the sentiments with CAC, DAX and FTSE all edging higher in early deals as investors digested the latest round of PMI data from China and the euro zone, but stayed cautious ahead of the US Federal Reserve meeting coming later in the week. However, disappointing cues from Asian markets took their toll on Indian markets and dragged the frontline gauges in the red. All the Asian equities ended the session in the red as slowing manufacturing growth weighed on China, while a stronger yen hit Japanese stocks.

Back home, metal and mining stocks extended their recent losses as latest economic data showed that growth in China’s manufacturing-sector activity slowed to three-month low. Additionally, telecom stocks too edged lower after COAI unveiled monthly addition data. Market leader Bharti Airtel added the maximum 17.22 lakh new users during the month to take its base to 19.65 crore at the end of November and Idea Cellular added 15.4 lakh new users to take its subscriber base to 6.52 crore at the end of the reported month.

The NSE’s 50-share broadly followed index Nifty declined by over ten points, to end below psychological 6,200 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over fifty points, to end below the psychological 20,700 mark.

However, broader markets outperformed benchmarks and ended the session in the green with a gain of over quarter a percent. The market breadth remained in favor of decliners, as there were 1,104 shares on the gaining side against 1,325 shares on the losing side, while 183 shares remained unchanged.

Finally, the BSE Sensex declined by 56.06 points or 0.27%, to settle at 20659.52, while the CNX Nifty lost 13.70 points or 0.22% to settle at 6,154.70.

The BSE Sensex touched a high and a low of 20764.52 and 20637.77, respectively. The BSE Mid cap index was up by 0.30%, while the Small cap index gained 0.36%.

The top gainers on the Sensex were SSLT up 4.54%, Infosys up 2.25%, Tata Power up 1.96%, Coal India up 1.18%, and ICICI Bank up 1.10%, on the flip side Jindal Steel down 2.96%, Sun Pharma down 2.47%, Bharti Airtel down 2.20%, RIL down 2.19%, and Mahindra & Mahindra down 2.14%, were the top losers on the index.

On the BSE Sectoral front, IT up by 1.56%, Consumer Durables up by 1.20%, Teck up by 1.03%, Healthcare up by 0.81%, and Capital Goods up by 0.44%, were the top gainers. While, Oil & Gas down by 1.61%, Auto down by 0.70%, FMCG down by 0.49%, PSU down by 0.29%, and Bankex down by 0.05%, were the top losers on the sectoral front.

Meanwhile, with an aim to enhance the country’s oil and gas production, the Cabinet Committee on Investments, headed by Prime Minister Manmohan Singh has cleared projects worth Rs 7,947-crore in the oil and gas sector for the companies such as IOC, ONCG CPCL and HPCL. Among the projects, Assam renewal project worth Rs 2,379 crore is taken up by ONGC.

Furthermore, the panel also cleared a proposed Rs 5,200 crore worth LNG terminal project of GSPC at Mundra. Awa-Salawas pipeline project worth Rs 134 crore is allocated to HPCL and crude oil pipeline from Chennai port to Manali refinery project of Rs 126 crore is taken up by CPCL, while Rs 108 crore investment project of petroleum oil and lubricants tap off point at Kobra in Chattisgarh is allotted to IOC.

India currently imports around 80 percent of its oil needs and 25 percent of natural gas domestic demand. Meanwhile, oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its energy needs. The Ministry wants domestic crude oil demand to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometers, comprising 26 sedimentary basins. The ministry has already noted that that 10th round of New Exploration Licensing Policy (NELP) auction would be announced by January 15, 2014 under which the government would auction 86 hydrocarbon blocks. 

The CNX Nifty touched a high and low of 6,183.25 and 6,146.05 respectively.

The top gainers on the Nifty were SSLT up by 4.09%, Infosys up by 2.29%, Power Grid Corporation of India up by 1.74%, Tata Power Company up by 1.61%, and Coal India up by 1.38%, On the other hand, Mahindra & Mahindra down by 2.89%, Jindal Steel & Power down by 2.85%, Sun Pharmaceuticals Industries down by 2.48%, Reliance Industries down by 2.28%, and Bharti Airtel down by 2.23%, were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.82%, Germany's DAX was up by 1.14%, and United Kingdom's FTSE 100 was up by 0.47%.

The Asian markets concluded Monday’s trade in red as slowing manufacturing growth weighed on China, while a stronger yen hit Japanese stocks. The International Monetary Fund stated that Indonesia should continue shoring up its economy to better prepare for when the US Federal Reserve starts reducing monetary stimulus. IMF projected that sluggish investment, weaker external demand and higher interest rates mean Indonesia’s economic growth will slow to between 5% and 5.5% this year and next, compared with 6.2% last year. Growth in China’s manufacturing-sector activity slowed to three-month low, initial results from HSBC’s monthly survey showed. The flash version of the December HSBC/Markit China manufacturing Purchasing Managers’ Index eased to 50.5, down from November’s final reading of 50.8.

Japan’s Tankan manufacturing index rose more-than-expected in the last quarter. The Tankan Manufacturing index rose to a seasonally adjusted 16, from 12 in the preceding quarter. Hong Kong’s gross national income rose 4.6% year-on-year to $550.1 billion in the third quarter, while Gross Domestic Product grew 4.7% to $549.7 billion, the Census & Statistics Department reported. Hong Kong’s GNI was larger than its GDP by $400 million, representing a net external primary income inflow of the same amount, and equivalent to 0.1% of GDP in that quarter.