Benchmarks continue to trade weak in late morning

Benchmarks lower by 0.4% each as risk aversion took center stage, in line with the negative global cues. Sentiments got dampened after Indian rupee depreciated to two-week low of 62.36/37 per dollar versus previous close of 62.26/27 per dollar.  Meanwhile, marketmen opted wait and watch approach ahead of the press conference of the Prime Minister where he will seek to dispel the perception of policy paralysis and will also highlight the steps taken to boost the economy.

On the global front, all the Asian equity markets were trading in the red at this point of time with Chinese markets declining around one and half a percent after Growth in the country’s services sector fell to a four-month low in December as business expectations dropped. Back home, traders were buying, IT, Teck and Consumer Durables while selling was seen in Capital Goods, Metal and Power on the BSE. Shares of public sector oil marketing companies (OMCs) like, BPCL, HPCL and IOC remained under pressure, as the government has said that it will 'look into' a demand to raise the quota of subsidised LPG cylinders to 12 per household in a year from the current limit of nine.

The market breadth on BSE remains negative with advances to declines in the ratio of 828:877. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,800 and 6,150 levels respectively. The BSE Sensex is currently trading at 20888.33 down by 89.29 points or 0.43% after trading in a range of 20856.53 and 20763.43. There were 8 stocks advancing against 22 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.01% and Small cap index gained 0.01%.

The top gaining sectoral indices on the BSE were, IT up by 1.36%, Teck up by 1.11%, and Consumer Durables up by 0.77% while Capital Goods down by 1.45%, Metal down by 1.07%, Power down by 1.06%, Auto down by 0.99%, and Bankex down by 0.63% were the top losers on the sectoral index. 

The top gainers on the Sensex were TCS up by 2.05%, Infosys up by 1.41%, HDFC Bank up by 0.80%, Hero MotoCorp up by 0.50%, and ONGC up by 0.44%. On the flip side, Tata Power was down by 2.59%,  Tata Motors was down by 2.59%, Mahindra & Mahindra was down by 2.57%, ICICI Bank was down by 2.20% and L&T was down by 1.94% were the top losers on the Sensex.

Meanwhile, The government has slashed the import tariff value of gold to $392 per 10 gram from $398 and silver to $638 per kg from $643 per kg, in line with global rates of the precious metals, which could lead to some softening in the price of the precious metal. Tariff value or the base price is set to determine the customs duty on the precious metal and to prevent under invoicing.

India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. At present, despite fall in global gold prices, it is being sold at a high premium in domestic market owing to the government measures to restrict the import of the precious metal in an effort to check country’s widening current account deficit (CAD). Meanwhile, the steps taken by the government has started yielding as Indian gold and silver imports has been witnessing declining trend over the past few months. During the first eight months (April-November) of the current financial year, gold and silver imports contracted by 23.8% to $25.5 billion, which also helped to contain the CAD at $5.2 billion, or 1.2% of GDP in Q2 FY14 as against the 4.9% of GDP in the Q1 FY14. India’s gold import is likely to come down to between 800-850 tonnes in current fiscal from 950 tonnes in FY13.

Amid rising concerns over declining gems and jewellery exports, recently, Commerce Ministry has sought for easing restrictions on import of gold imposed by the RBI citing that the central bank has laid down various pre-conditions for inward shipment of the precious metal such as 80/20 rule under which 20% of all gold imports by importers has to be re-exported. Gems and jewellery sector is a major consumer of imported gold and accounts for about 15 per cent of country’s total exports.

The CNX Nifty is currently trading at 6,192.25 down by 28.90 points or 0.46% after trading in a range of 6,209.05 and 6,178.85. There were 14 stocks advancing against 36 stock declines on the index. 

The top gainers of the Nifty were TCS up by 1.81%, Infosys up by 1.10%, HDFC Bank up by 0.99%, HCL Tech up by 0.84% and KOTAK Bank up by 0.70% On the flip side, Tata Power down by 3.43% ,Tata Motors down by 2.56%, M&M down by 2.45%, ICICI Bank down by 2.17%, and BHEL down by 2.03% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite declined 28.79 points or 1.36% to 2,080.60, Hang Seng tumbled 407.52 points or 1.75% to 22,932.53, Jakarta Composite crumbled 49.40 points or 1.14% to 4,277.87, KLSE Composite decreased 13.59 points or 0.73% to 1,839.36, Straits Times shed 19.89 points or 0.63% to 3,154.76, Seoul Composite contracted 23.93 points or 1.22% to 1,943.26 and Taiwan Weighted was down by 65.52 points or 0.76% to 8,547.02.