Benchmarks continue to trade in red in afternoon session

Indian equity benchmarks continued to trade in red in afternoon session amid selling witnessed in banking, IT and pharma stocks. Investors’ sentiments were dented as the HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell from 47.2 in November to 46.7 in December, the lowest in three months and below the 50 mark, that separates growth and contraction, for the sixth straight month. Furthermore, uncertainty over the outcome of the upcoming Lok Sabha elections and weak Asian cues also added to the pessimistic sentiments. On sector wise, bankex was top loser down by 0.98% followed by IT and power stocks. On stock specific movements, Capital Goods, Heathcare and Auto were trading up by over 0.50%, while, Bankex, IT and Power were trading down by over 0.20% on BSE.

Selling was witnessed in index heavyweights with ICICI Bank, Reliance Ind, Infosys and SBI down over 1% each. On the other hand, State-owned Oil and Natural Gas Corp (ONGC) was up nearly 3% after the company said it will invest around $9 billion in bringing to production an array of oil and gas discoveries in its prolific Krishna-Godavari basin block off the east coast by 2017-18. Among other shares, media companies were trading higher by up to 7% on hopes that the year 2014 turn to be a good year for the entire sector including television, radio, digital and print media.

On global front, Asian equity indices were trading in red with Hang Seng down by 0.74% and Shanghai Composite down by 1.96%, tracking China's weak December services PMI. Back home, the NSE Nifty and BSE Sensex were trading down their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,121 stocks traded, 1259 stocks advanced, while 749 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,813.78 down by 37.55 points or 0.18% after trading in a range of 20,913.79 and 20,740.63. There were 12 stocks advancing against only 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.27%, while Small cap index up by 1.13%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.59%, Heathcare up by 0.58%, Auto up by 0.54%, Consumer Durables up by 0.52% and Metal up by 0.28%. While, Bankex down by 0.98%, IT down by 0.38%, Power down by 0.25%, Realty down by 0.16% and Teck down by 0.13% were the losing indices. 

The top gainers on the Sensex were ONGC up by 2.70%, Tata Motors up by 1.48%, Sun Pharma up by 1.14%, Gail India up by 1.02% and Wipro up by 0.83%. On the flip side, ICICI Bank down by 1.82%, SBI down by 1.35%, Tata Powers down by 1.19%, RIL down by 1.14% and Coal India down by 1.04%.

Meanwhile, With a view to improve liquidity position of beleaguered sugar industry, the government has notified the modalities in order to avail the sector with interest-free loans to the tune of Rs 6,600 crore from banks for payments to cane growers. The Food Ministry in its notification has stated that notified scheme for extending financial assistance to sugar undertakings 2014 will enable the industry to clear cane price arrears of previous seasons and timely settlement of cane price of current season.

The Cabinet Committee on Economic Affairs (CCEA) had approved Rs 6,600 crore loans for the cash-starved sugar mills last month. The interest burden on the loans is estimated at Rs 2,750 crore during the next five years and will be borne by the government from the Sugar Development Fund. The notification further added that interest subvention rate up to 12 percent, whichever is lower as per normal banking practice, shall be provided to sugar mills through participating scheduled commercial banks, regional rural banks and cooperative banks for five years.

The government will release interest subvention amounts on a quarterly basis in advance to the nodal bank, while, loan will be disbursed through a separate bank account to ensure the utilisation of money is monitored. On the other hand, in order to get loans, sugar mills will have to submit an utilisation certificate, verified by the sugarcane commissioner, stating the loan has been used for the specified purpose and state sugarcane commissioner will monitor utilisation of the loan. Furthermore, sugar mills with loans classified as non-performing assets by banks will be eligible for the credit provided the state governments concerned guarantee their new loans.

Further, Food Ministry notified that mills have to repay the loans in five years and can avail of a moratorium on repayment for the first two years. Loans will be given to sugar mills that have been functional during the 2013-14 (October-September) and the quantum of loan would be equivalent to the excise duty, cess and surcharge on sugar paid by the mills in the past three years. Meanwhile, Finance Ministry will soon issue instructions to banks to operationalise the scheme, including the appointment of the nodal bank.

The CNX Nifty is currently trading at 6,197.10 down by 14.05 points or 0.23% after trading in a range of 6,224.70 and 6,176.15. There were 19 stocks advancing against 31 declining on the index.

The top gainers of the Nifty were ONGC up by 2.77%, Ranbaxy up by 2.10%, Jindal Steel up by 1.82%, Tata Motors up by 1.65% and BPCL up by 1.40%. On the flip side, ICICI Bank down by 1.83%, SBI down by 1.55%, PNB down by 1.21%, Hero Motocorp down by 1.20% and DLF down by 1.10% were the major losers on the index.

The Asian equity indices were trading in red; Hang Seng down by 0.74%, Straits Times down by 0.06%, Taiwan Weighted down by 0.54%, Jakarta Composite down by 0.91%, Shanghai Composite down by 1.96% and KLSE Composite down by 0.01%. While, Seoul Composite up by 0.44%,