Benchmarks plunge as manufacturing PMI contracts

Indian equities pared gains and dropped well below the neutral line in the late afternoon session on account of selling in frontline counters. The trade turned pessimistic after HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - dropped slightly from 51.3 in November to 50.7 in December. Traders were seen piling positions in IT, Metal and Consumer Durables stocks while selling was witnessed in Capital Goods, Realty and Power sector stocks. In scrip specific development, MCX was trading firm on reports that a jewellers’ trade body is planning to buy 5% in the exchange. On the global front, most of the Asian markets were trading in green, while the European markets were trading on mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,300 and 21,100 levels respectively. The market breadth on BSE was positive in the ratio of 1304:1114 while 123 scrips remained unchanged.

The BSE Sensex is currently trading at 21031.79 down by 108.69 points or 0.51% after trading in a range of 21,331.32 and 21,003.07. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.37%, while Small cap index was down by 0.15%.

The gaining sectoral indices on the BSE were IT up by 0.21%, Metal up by 0.02% and Consumer Durables up by 0.01%. On the flip side, Capital Goods down by 2.03%, Realty down by 1.52%, Power down 1.31%, FMCG down 1.11% and Oil & Gas down 0.92% were the top losers on the index. 

The top gainers on the Sensex were Maruti Suzuki up by 1.40%, Tata Steel up by 0.81%, Hindalco Industries up by 0.78%, HDFC up by 0.77% and SBI up by 0.72%. On the flip side, BHEL down 2.74%, L&T down by 2.48%  Bharti Airtel down by 2.10%, Tata Power down by 2.05% and NTPC down by 1.78%.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) is likely to consider the Power Ministry’s proposal soon to amend the Mega Power Policy introduced in November 1995 to provide impetus to the setting up of large power projects and derive benefits from economies of scale. The amended power policy is expected to provide benefits to thermal power projects of 1,000 MW and hydel plants of 500 MW. Meanwhile, policy guidelines were also modified in 1998, 2002 and 2006 to encourage power development in the North Eastern region and Jammu & Kashmir.

Mega Power Policy allows mega power projects to tie up electricity sales to distribution utilities through long-term power purchase agreements. The benefits of Policy also apply to energy-efficient supercritical projects, which are awarded through international competitive bidding with the mandatory condition of setting up indigenous manufacturing facilities.

These mega power projects can also sell power outside these agreements, in accordance with the National Electricity Policy 2005 and the Tariff Policy 2006, which have amended from time to time.

The CNX Nifty is currently trading at 6,259.15, down by 42.50 points or 0.67% after trading in a range of 6,358.30 and 6,258.00. There were 13 stocks advancing against 37 declining on the index.

The top gainers of the Nifty were Bank of Baroda up by 1.74%, Maruti up by 1.53%, Power Grid up by 1.51%, Ranbaxy up by 1.50% and PNB up by 1.17%. On the flip side, JP associates down by 3.33%, IDFC down by 3.10%, L&T down by 2.55%, BHEL down by 2.39% and Ambuja Cement down by 2.31% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng gained 0.14%, Taiwan Weighted was up by 0.01%, Jakarta Composite added 1.10% and Straits Times inched up by 0.17%.

On the flip side, Shanghai Composite declined 0.31%, KLSE Composite contracted 0.95% and Seoul Composite tumbled 2.20%. Japanese markets remained closed for the trade today.

The European markets were trading on a mixed note; France’s CAC 40 was down 0.47%, UK’s FTSE 100 lost 0.39% while Germany’s DAX was up 0.11%.