Benchmarks add losses; Nifty below 6300 mark

Indian equities added losses to continue its weak trade in the late afternoon session on account of selling in frontline counters. The sentiments were under pressure despite Deputy Chairman of Planning Commission Montek Singh Ahluwalia stated that the Indian economy is likely to grow at a pace of 7.5-8 percent in the next year. Ahluwalia asserted that in a globalised world India cannot become self-reliant and the prevailing economic slowdown is mainly caused by global factors and partially by domestic factors. Traders were seen piling positions in Metal, FMCG and Oil & Gas stocks while selling was witnessed in Realty, IT and TECK sector stocks. Hectic activity was witnessed in railway stocks on reports that the government may allow foreign direct investment (FDI) in railways. In scrip specific development, Idea Cellular was trading in green after it received shareholders’ approval for increasing the investment limit for overseas investors to 49 percent. Sesa Sterlite was firm after the company commenced mining in Karnataka, albeit with production caps, after receiving permission from Supreme Court.

On the global front, the Asian markets were trading in green barring Shanghai Composite, while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,300 and 21,200 levels respectively. The market breadth on BSE was positive in the ratio of 1264:1061 while 150 scrips remained unchanged.

The BSE Sensex is currently trading at 21165.23 down by 28.35 points or 0.13% after trading in a range of 21,304.70 and 21,123.30. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices added gains; the BSE Mid cap index was up by 0.08%, while Small cap index up by 0.36%.

The gaining sectoral indices on the BSE were Metal up by 1.12%, FMCG up by 0.30% and Oil & Gas up by 0.21% while, Realty down by 1.28%, IT down by 1.03%, TECK down by 0.74%, Power down by 0.35% and Bankex down by 0.33%. 

The top gainers on the Sensex were Coal India up by 1.63%, SSLT up by 1.29%, Tata Motors up by 1.23%, BHEL up by 1.13% and Reliance Industries up by 0.77%. On the flip side, Infosys down by 2.03%, Bajaj Auto down by 1.51%, Mahindra & Mahindra down by 1.29%, Hero MotoCorp down by 1.04% and Wipro down by 0.95%.

Meanwhile, Reserve Bank of India (RBI), in its ‘Financial Stability Report – December 2013’, has underscored that risks to the banking sector have increased during the past half-year and that all the risks dimensions captured in the banking stability indicator show increase in vulnerabilities in the banking sector. As per the report banking stability measures, based on co-movements in banks' equity prices, also indicate that the distress dependencies within the banking system have risen during this period.

Further, the analysis shows that failure of a major corporate or a major corporate group could trigger a contagion in the banking system due to exposures of a large number of banks to such corporates. Additionally, RBI in its report expressed concerns over asset quality of banks. It highlighted that macro stress tests on credit risk suggest that if the adverse macroeconomic conditions persist, the credit quality of commercial banks could deteriorate further. However, it also underscored that under improved conditions, the present trend in credit quality may reverse during the second half of 2014-15.

Moreover, RBI remained more distressed over asset quality of Scheduled Commercial Banks (SCBs). It noted that Gross Non-performing Assets (GNPA) ratio of SCBs as well as their restructured standard advances ratio increased and therefore the total stressed advances ratio rose significantly to 10.2 per cent of total advances as at end September 2013 from 9.2 per cent of March 2013.

The CNX Nifty is currently trading at 6,296.65, down by 17.15 points or 0.27% after trading in a range of 6,344.05 and 6,287.35. There were 16 stocks advancing against 33 declining while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Coal India up by 1.78%, BHEL up by 1.39%, SSLT up by 1.34%, Jindal Steel up by 1.32% and NMDC up by 1.10%. On the flip side, DLF down by 2.92%, Infosys down by 2.05%, Ranbaxy down by 1.84%, Bajaj Auto down by 1.54% and Ambuja Cement down by 1.49% were the major losers on the index.

Most of the Asian equity indices were trading in green; KLSE Composite up by 0.13%, Straits Times up by 0.19%, Jakarta Composite up by 0.60%, Nikkei 225 up by 0.69%, Taiwan Weighted up by 1.04%, Seoul Composite up by 0.45% and Hang Seng added 0.01%. On the other hand, Shanghai Composite down by 0.18% was the sole loser.

The European markets were trading in green; France’s CAC 40 was up 0.21%, Germany’s DAX added 0.01% and UK’s FTSE 100 gained 0.22%.