Benchmarks extend losses in late afternoon session

Indian equity benchmarks extended losses and reached at their intra-day low level in the late afternoon session on account of selling witnessed in frontline counters. Investors remained wary ahead of December WPI inflation, which will determine the RBI’s stance on key policy rates in coming monetary policy review on January 28. Weak global cues also added to the pessimistic sentiments. IT stocks were witnessing profit booking after the IT major Infosys posted better than expected Q3FY14 result. Realty index was the top losers down by over 1.30% closely followed by metal trading down by 1.28%. On stock specific movement, HDFC, Cipla and RIL were trading up by over 0.40% and Tata Steel, Wipro and TCS were trading down by over 1.60%. Among other stocks, Unitech has dipped around 3% to Rs 13.30, amid reports that the company has received a default notice from LIC Housing Finance on a loan taken in 2007. Rushil Décor, extending its previous day’s 3% gain has rallied nearly 17% to Rs 64 on back of heavy volumes on the bourses.

On the global front, the Asian markets were trading mostly in red with Nikkei 225 down by 3.08%, Seoul Composite down by 0.15%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 21,000 levels respectively. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1482: 1038; while 152 shares remained unchanged.

The BSE Sensex is currently trading at 21025.66 down by 108.55 points or 0.51% after trading in a range of 21154.76 and 21011.13. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.48% and Small cap index down by 0.26%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.12% and Healthcare up by 0.05%. While, Realty down by 1.41%, Metal down by 1.35%, IT down by 0.84%, Teck down by 0.83% and Bankex down by 0.74% were the top losing indices on BSE.  

The top gainers on the Sensex were HDFC up by 0.76%, Cipla up by 0.63%, RIL up by 0.30%, Dr Reddy’s Lab up by 0.22% and Mahindra & Mahindra up by 0.12%. On the flip side, Tata Steel down by 2.58%, ICICI Bank down by 1.83%, SSLT down by 1.71%, TCS down by 1.57% and Wipro down by 1.53%.

Meanwhile, in a big positive development to Indian MRO industry, the government has accorded infrastructure status to boost India's fledgling industry for maintenance, repair and overhaul (MRO) of aircraft and engines. As per the RBI’s latest policy change, the MRO industry will be treated as a part of airport infrastructure and would also be considered part of the sub-sector of airport in the transport sector infrastructure for the purpose of external commercial borrowings (ECBs).

Policy changes to classify the capital-intensive industry as transport infrastructure is quite timely as the MRO industry has long gestation period and access to foreign debt is vitally important and critical for sector. Industry players are now able to avail ECBs for long tenure and cheaper debts from international markets, helping to boost the industry’s growth.

The Indian MRO industry currently has an annual turnover of about $800 million. The industry is expected to grow at annual growth rate of 10 percent over the next decade on the back of growing aviation businesses in the country with the expanding fleet size of Indian carriers and the entry of more players.

The CNX Nifty is currently trading at 6,234.90, down by 37.85 points or 0.60% after trading in a range of 6,280.35 and 6,234.65. There were 10 stocks advancing against 40 declining on the index.

The top gainers of the Nifty were Cairn up by 1.99%, Cipla up by 0.86%, HDFC up by 0.78%, IndusInd bank up by 0.62% and Dr. Reddy's Laboratories up by 0.48%. On the flip side, Jindal Steel down by 2.77%, DLF down by 2.67%, Tata Steel down by 2.63%, NMDC down by 2.44% and Ranbaxy down by 2.38% were the major losers on the index.

The Asian equity indices were trading mostly in red; Shanghai Composite up by 0.86%. While, Nikkei 225 down by 3.08%, Seoul Composite down by 0.15%, Taiwan Weighted down by 0.21%, Straits Times down by 0.51% and  Hang Seng down by 0.43%.

The European markets were trading in red; France’s CAC 40 was down 0.43%, Germany’s DAX was down 0.87% and UK’s FTSE 100 lost 0.51%.