Weak trade persists; Realty, Bankex drag

Indian equities continued its weak trade hovering near the lowest point of the day in the late afternoon session on account of selling in frontline counters and taking cues from global counterparts. The sentiments were on pessimistic note after Planning Commission Deputy Chairman Montek Singh Ahluwalia attributed the decline in India’s growth rate mainly to domestic factors and expressed the need for the government to take quick decisions to boost the economic growth. Also ahead of RBI’s third quarter monetary policy review, Reserve Bank of India’s (RBI) Governor Raghuram Rajan comment that inflation is a destructive disease which is forcing the central bank to keep interest rates high too added selling pressure. Traders were seen selling in Realty, Bankex and Metal sector stocks. In scrip specific development, Opto Circuits (India) was trading firm on reports that global investment banker Goldman Sachs is likely to acquire 26% stake in Indian medical equipment maker for around Rs 300 crore.  Hectic activity was witnessed in Ajay Piramal-promoted Piramal Enterprises as the company is evaluating a proposal from merchant bankers to acquire a five percent stake in Axis Bank through block deals.

On the global front, the Asian markets were trading in red, while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,200 and 20,800 levels respectively. The market breadth on BSE was negative in the ratio of 579:1809 while 106 scrips remained unchanged.

The BSE Sensex is currently trading at 20768.23, down by 365.33 points or 1.73% after trading in a range of 20,899.03 and 20767.52. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were too trading in red; the BSE Mid Cap and Small Cap indices plunged by 2.16% and 1.93% respectively.

The top losing sectoral indices on the BSE were Realty down by 4.68%, Bankex down by 3.46%, Metal down by 3.28%, Auto down by 2.65%, and Capital Goods down by 2.48% while there was no gaining sectoral indices on BSE

The top gaining stocks on BSE were Wipro up 0.19%, Sun Pharma up by 0.07% and Hindustan Unilever up 0.02% were the only gainers among 30 share index.

On the flip side, Tata Steel down by 4.95%, Tata Motors down by 4.72%, ICICI bank down by 3.95%, HDFC Bank down by 3.42% and SSLT down 3.30%.

Meanwhile, India's crude oil production rose by 1.6 percent to 3.25 million tonnes (MT) in December 2013 from 3.20 MT in the same month of last year, on the back of higher output from Cairn India's Rajasthan oilfields helping to offset the drop in production from state-owned Oil and Natural Gas Corp (ONGC) fields. ONGC’s crude oil production declined by around 3 percent to 1.88 MT in December from 1.94 MT recorded in same month of previous year. On the other hand, Cairn India's oil output soared by around 16 percent to 0.83 MT.

Indian natural gas production dipped by 9.9 percent to 3,001 million cubic meters in the month as Reliance Industries' KG-D6 field reported 35.8 percent drop in offshore natural gas output to 672 million cubic meters. RIL's domestic refinery at Jamnagar recorded 11.9 percent drop in fuel output in December due to a planned maintenance shutdown. Country’s overall fuel production from 22 domestic refineries declined by 1.7 percent 18.63 MT in December’ 2013 from 18.95 MT petroleum products produced in December’ 2012.

As India’s oil and gas demand has been increasing at robust pace, it has become imperative to enhance the country’s oil and gas production. Oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil and gas needs. India currently imports around 80 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves.

Oil Minister M V Moily has also announced setting up of a Multi-Organisational Team (MOT) to re-examine India’s hydrocarbon resources in all 26 sedimentary basins in the country. India will offer at least 46 oil and gas blocks soon under the 10th round of NELP auction under completely revamped terms. Tenth round of NELP auction will be the second highest offering of blocks since the advent of NELP in 1997, a common platform for public and private sector companies to bid for the blocks.

The CNX Nifty is currently trading at 6,156.65, down by 110.10 points or 1.76% after trading in a range of 6,188.55 and 6,155.60. There were only 4 stocks advancing against 46 declining on the index.

The top gainers of the Nifty were HCL Tech up by 0.72%, Wipro up by 0.33%, HUL up by 0.07% and Ultratech Cement up 0.01%.

On the flip side, JP Associates down by 7.60%, Ranbaxy down by 7.17%, DLF down by 6.37%, Tata Steel down by 4.91% and Tata Motors down by 4.75% were the major losers on the index.

The Asian equity indices were trading in red; Seoul Composite down by 1.56%, Nikkei 225 down by 2.51%, Hang Seng down by 2.11%, KLSE Composite down by 1.20%, Straits Times down by 1.24%, Jakarta Composite down by 2.48%, Shanghai Composite down by 1.03% and Taiwan Weighted down by 1.58%.

The European markets were trading in red; France’s CAC 40 was down 0.05%, Germany’s DAX lost 0.55% and UK’s FTSE 100 dropped 2.88%.