Markets continue to trade in red in afternoon session

Indian equity benchmarks after pairing all early gains continue to trade in the negative territory in afternoon session as investors sentiment were weighed down after the Reserve Bank of India (RBI) increased repo rate by 25 bps from 7.75% to 8%. Major selling was witnessed in banking stocks, however, the market losses remain capped taking support from the government’s stand that country's economic fundamentals were very strong and there was no cause for concern. On stock specific movement, Tata Steel, Tata Motors and RIL were trading up by over 1%, while, Hindustan Unilever, Sun Pharma and Infosys were trading down by 1% on BSE. Petronet LNG, extending its over 10% fall in past two weeks, was trading lower by around 1% at Rs 104, on concerns of weak financial performance for the Q3 FY14. Just Dial has fallen by nearly 6% to Rs 1,388 as firm’s net profit rose only by 3.80% in Q3 FY14.

On global front, Asian shares were trading mixed as turmoil in emerging markets and concerns about an economic slowdown in China took their toll. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,035 stocks traded, 1,026 stocks advanced, while 890 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,686.36 down by 21.09 points or 0.10% after trading in a range of 20,795.35 and 20,554.28. There were only 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index gained 0.46%.

The gaining sectoral indices on the BSE were Realty up by 1.30%, Auto up by 1.06%, Metal up by 0.91%, Oil and Gas up by 0.81% and Capital Goods up by 0.64%. While, Teck down by 0.72%, IT down by 0.71%, FMCG down by 0.65%, Bankex down by 0.59% and Healthcare down by 0.42% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Steel up by 2.22%, Tata Motors up by 2.07%, RIL up by 1.40%, Bajaj Auto up by 1.22% and Maruti Suzuki up by 1.13%. On the flip side, Hindustan Unilever down by 2.62%, Sun Pharma down by 1.56%, Infosys down by 1.25%, Cipla down by 1.05% and HDFC Bank down by 0.88%.

Meanwhile, in a move to overcome the shortage of iron ore pellets in the country, the government has imposed a five percent export duty on iron pellets, a critical raw material for the steel industry. Iron ore pellets made from iron ore fines were exempted from the duty as the exports were negligible in 2012-13. However, during April-November 2013, iron ore pellets’ exports increased sharply, causing the shortage of iron ore pellets for domestic requirements. Iron ore fines and lumps already attract an export duty of 30 per cent.

Export duty on pellets had been removed as the steel ministry asked the finance ministry to revoke duty on pellets as it goes against the principle of promoting value addition within the country. But recently Indian steel producers sought an export duty of 30% on overseas shipments of iron-ore pellets, on par with the duties on exports of iron-ore fines and lumps, citing that the current nil rate of export duty on iron-ore pellets had led to a sharp rise in moving the value added raw material overseas. Over the last few years, domestic iron ore production has came under pressure due to the prevailing regulatory concerns such as mining ban in Goa and Karnataka that has impacted the performance of country’s mining sector.

Tin related development, the Government has also increased the excise duty on pan masala and tobacco products packed in pouches with the aid of packaging machines under the compounded levy scheme. These products including gutka, chewing tobacco, unmanufactured tobacco and filter khaini and attract excise duty on the basis of the production capacity , which is determined by the speed of the machines used to pack pouches.

The CNX Nifty is currently trading at 6,127.50 down by 8.35 points or 0.14% after trading in a range of 6,163.60 and 6,085.95. There were only 24 stocks advancing against 26 declining on the index.

The top gainers of the Nifty were Ranbaxy up by 2.42%, Tata Steel up by 2.19%, Tata Motors up by 1.81%, DLF up by 1.79% and JP Associates up by 1.37%. On the flip side, Hindustan Unilever down by 2.58%, Indusind Bank down by 2.11%, Sun Pharma down by 1.63%, Lupin down by 1.58% and Ultratech Cement down by 1.29% were the major losers on the index.

The Asian equity indices were trading mixed; Seoul Composite up by 0.41%, Hang Seng up by 0.03%, KLSE Composite up by 0.32%, Straits Times up by 0.16%, Jakarta Composite up by 0.71%. While, Shanghai Composite down by 0.10% and Nikkei 225 down by 0.02%.