Benchmarks pare losses; trade continues in red

Indian equities pared losses but continued to trade in red in the late afternoon session on account of selling in frontline counters. Though the markets started the trade in green it eventually dropped after Reserve Bank of India, in its third Quarter Review of Monetary Policy Statement 2013-14, much against the street’s expectation went ahead and hiked key repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 8.0% from 7.75%. However, the market recovered most of the lost ground after C Rangarajan, chairman, Economic Advisory Council stated that if inflation moves along the direction expected, then this rate hike may perhaps be the last in the series of raising the policy rate. Traders were seen piling position in Metal, Realty and Auto stocks while selling was witnessed in IT, TECK and HealthCare sector stocks. In scrip specific development, Ranbaxy Laboratories was trading in green on account of value buying after the stock fell for two consecutive trading sessions following a ban by US drug regulator on more of its products.

On the global front, the Asian markets barring Hang Seng and Nikkei 225 were trading in green, while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,150 and 20,700 levels respectively. The market breadth on BSE was positive in the ratio of 1203:1102 while 164 scrips remained unchanged.

The BSE Sensex is currently trading at 20695.54, down by 11.91 points or 0.06% after trading in a range of 20795.35 and 20554.28. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices continued to trade in green; the BSE Mid cap index was up by 0.22% and Small cap index was trading up by 0.44%.

The gaining sectoral indices on the BSE were Metal up by 1.57%, Realty up by 1.39, Auto up by 0.93%, Oil & Gas up by 0.48% and Capital Goods up by 0.38%. While, IT down by 1.35%, TECK down by 1.32%, HealthCare down by 0.56% and Bankex down by 0.34% were the only losing indices on BSE.   

The top gainers on the Sensex were Tata Steel up by 3.27%, Hindalco Industries up by 2.30%, Tata Motors up by 1.93%, Bajaj Auto up by 1.33% and Tata Power up by 1.24%.

On the flip side, Axis Bank down by 2.40%, Sun Pharma down by 1.72%, Infosys down by 1.52%, Hindustan Unilever down by 1.49% and TCS down by 1.43%.

Meanwhile, the ministry of Road Transport and Highways has asked the Planning Commission to clarify its contradictory stand on highway sector’s regulator. Presently, Planning Commission is working on draft for setting up regulators in all public utility sectors that will directly accountable to Parliament. Road ministry is confused over the Planning Commission present position as it is opposing a proposed highways regulator on one side, while pushing for regulatory reforms covering sectors including highways on the other side. The highway ministry stated that it would respond to a request seeking comments on the regulatory reform draft only after the ‘contradiction’ is resolved.

The Planning Commission proposed rules are likely to be applicable to regulators in various sectors including telecom, power, airports and highways. Regarding the highways ministry's draft note, the commission emphasized that it doesn't expect the proposed regulator to serve much useful purpose for the sector. Over the past 12 months, the commission had also raised objections to several key policy measures proposed by the ministry to revive the highways sectors. These measures include increasing the defect-liability period of builders aimed at ensuring better quality of roads, deferral of premium payment by highway developers and allowing concessionaires to divest full equity in highway projects.

In the central budget for 2013-14, the government has proposed to set up a regulator for the highways sector. It has noted that the sector has been facing issues like financial stress, enhanced construction risk and contract management which can be better addressed by an independent authority. In the current fiscal, NHAI has managed to give just 479 km of road projects against its target of 3,000 km by September. In the previous financial year, only 1,116 km of projects were awarded against a target of 9,500 km.

The CNX Nifty is currently trading at 6,128.30, down by 7.55 points or 0.12% after trading in a range of 6,163.60 and 6,085.95. There were 26 stocks advancing against 24 declining on the index.

The top gainers of the Nifty were Tata Steel up by 3.38%, Hindalco Industries up by 2.57%, Ranbaxy up by 2.31%, Tata Motors up by 1.88% and JP Associates up by 1.87%.

On the flip side, Axis Bank down by 2.50%, Lupin down by 2.08%, HCL Tech down by 1.83%, Sun Pharma down by 1.81% and Hindustan Unilever down by 1.53% were the major losers on the index.

The Asian equity indices were trading mostly in green; Seoul Composite up by 0.34%, KLSE Composite up by 0.23%, Straits Times up by 0.58%, Jakarta Composite up by 0.43% and Shanghai Composite was up 0.26%. On the other hand, Hang Seng was down 0.07% and Nikkei 225 down by 0.17% were the only losers among Asian pack.

Taiwan market is closed on account of ‘No Trading’ day. The market will open tomorrow only for Clearing & Settlement and will remain close till February 4 on account of ‘Spring Festival’ holiday.

The European markets were trading in green; France’s CAC 40 was up 0.60%, Germany’s DAX added 0.44% and UK’s FTSE 100 gained 0.26%.