Weak trade persists; Realty, Capital goods drag

Indian equities continued to trade weak in the late afternoon session on account of selling in frontline counters taking cues from global counterparts. Economic Affairs Secretary Arvind Mayaram's statement that inflation will moderate in coming months but the country would need to bridge the demand-supply gap of essential food items to keep prices under check in the long run too failed to add any upside to the market. Traders were seen piling positions in Oil & Gas, PSU and Metal stocks while selling was witnessed in Realty, Capital Goods and Bankex sector stocks. In scrip specific development, Gokul Refoils & Solvent, Sanwaria Agro, JVL Agro Industries edged lower in trade on reports of CCEA likely of considering proposal to hike import duty hike on refined edible oil to 10%. Shares of gold financing companies i.e. Muthoot Finance and Manappuram Finance, gained after the central bank allowed NBFC to lend up to 75% of the value of gold from 60% at present.

On the global front, the Asian markets were trading in red barring Jakarta Composite, while the European markets too were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,200 and 20,700 levels respectively. The market breadth on BSE was negative in the ratio of 1028:1344 while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 20693.18, down by 36.20 points or 0.17% after trading in a range of 20,778.13 and 20,652.69. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.76%, while Small cap index was down 0.71%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.69%, PSU up by 0.65%, Metal up by 0.42%, Power up by 0.26% and Health Care up by 0.23%.

On the other hand, Realty down by 2.27%, Capital Goods down by 1.83%, Bankex down by 0.86%, Auto down by 0.65% and FMCG down by 0.63% were the top losers on the index.  

The top gainers on the Sensex were SSLT up by 3.65%, NTPC up by 3.43%, ONGC up by 2.51%, Coal India up by 1.89% and Dr. Reddy’s Lab up by 1.74%. On the flip side, Hindalco Industries down by 2.38%, L&T down by 2.25%, Axis Bank down by 2.21%, Maruti Suzuki down by 1.78% and  SBI down by 1.12%.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) is expected to consider Food Ministry's proposal soon of increasing import duty on refined edible oil to 10 percent from the current 7.5 percent in order to discourage cheaper inflows of refined oils from overseas for protecting domestic refiners and farmers. Last year, Food Ministry's proposal was rejected by the CCEA amid fears of its impact on elevated inflation.

Meanwhile, the negative inflation in edible oils for a fifth straight month in November as compared with a 6.9% headline inflation during the same period, has encouraged the government for a duty hike in edible oil. On the other hand, the agriculture ministry feels the duty structure on edible oils should be such that it maintains domestic prices in accordance with the movement of prices globally.

India imports more than a half of its annual edible oil requirements. Despite, the world's largest edible oil buyer, India impose low import duties. However, major exporters such as Indonesia and Malaysia offer duty incentives on supplies of refined edible oils to promote their local refiners. In November, Indian refined oil imports shot up by 172% in a year to 2,08,076 tonnes, while crude oil purchases from overseas were up by only 20% at 719,035 tonnes.

The CNX Nifty is currently trading at 6,159.90 down by 14.70 points or 0.24% after trading in a range of 6,188.05 and 6,148.25. There were 15 stocks advancing against 35 declining on the index.

The top gainers of the Nifty were SSLT up by 3.89%, NTPC up by 3.32%, ONGC up by 2.47%, BPCL up by 2.44% and Coal India up by 1.97%. On the flip side, JP Associates down by 4.32%, Hindalco Industries down by 2.47%, ACC down by 2.30%, L&T down by 2.26% and DLF down by 2.19% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite down by 0.82%, Nikkei 225 down by 1.50%, Hang Seng down by 0.91%, Taiwan Weighted down by 0.48%, Straits Times down by 0.31%, KLSE Composite down 0.25% and Seoul Composite down by 0.66% while, Jakarta Composite up by 0.04%.

The European markets were trading in red; France’s CAC 40 was down 0.36%, Germany’s DAX was down 0.18% and UK’s FTSE 100 lost 0.05%.