Benchmarks show signs of fatigue; consolidate after recovering from day’s low

Indian equity markets have started showing signs of fatigue, with benchmark equity indices gradually coming off from day’s high level as investors further engage in profit-booking activities. Recovering from day’s low level, markets were just about consolidating in the range-bound session of trade, with both Sensex and Nifty, gaining over a percent and trading past the crucial 20,750 and 6,150 levels respectively. Meanwhile, the broader indices, more or less in-line with larger peers, were up with gains over half a percent.On the global front, Asian markets firmed on Wednesday on account of monetary tightening measures by the Turkish central bank which surprisingly hiked the overnight lending rate by 425 basis points to 12%.

Closer home, amidst across the board buying activities, stocks from Metal counter were under-performing. On the flip side, Healthcare, Auto and IT counters were showing degree of outperformance. Steel stocks, like Tata Steel and SAIL are trading downbeat after government has imposed a five percent export duty on iron pellets, a critical raw material for the steel industry. However, JSW Steel’s stocks were trading higher on reporting good set of Q3 numbers. Consolidated net sales of the company was higher than street estimate at Rs 13,383 crore. Additionally, pharmaceutical stocks, viz, Aurobindo Pharma, Shasun Pharmaceuticals, Sun Pharmaceutical Industries, Dishman Pharmaceuticals and Chemicals, Biocon, Ipca Laboratories, Ranbaxy Laboratories, were in demand.

In stock-specific activities, Maruti Suzuki’s shares rebounded over as much as 8 percent, recovering almost fully from an 8.2 percent drop on Tuesday due to concerns about Suzuki Motor's plans to invest $488 million to build a car plant in India's Gujarat state. Additionally, ICICI Bank were trading higher over 3/4 of a percent on reporting in-line with expectation Q3 numbers. The market breadth on BSE was positive, out of 1,934 stocks traded, 1,268 stocks advanced, while 881 stocks declined on the BSE.

The BSE Sensex is currently trading at 20772.09, up by 88.58 points or 0.43% after trading in a range of 20,828.68 and 20,734.28. There were 19 stocks advancing against 10 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index up by 0.52%.

The gaining sectoral indices on the BSE were Healthcare up by 1.76%, Auto up by 1.42%, IT up by 0.93%, Capital Goods up by 0.91% and Teck up by 0.89%. While, Metal down by 0.94% and FMCG down by 0.08% were the losing indices on BSE.   

The top gainers on the Sensex were Maruti Suzuki up by 6.88%, BHEL up by 3.13%, Hero MotoCorp up by 2.95%, Sun Pharma up by 2.93%, Cipla up by 1.64%. On the flip side, Hindalco Inds down by 1.98%, Tata Steel down by 1.75%, SSLT down by 1.45%, SBI down by 1.19% and HDFC down by 0.79%.

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 6,156.50, up by 30.25 points or 0.49% after trading in a range of 6,170.45 and 6,146.45. There were 37 stocks advancing against 13 declining on the index.

The top gainers of the Nifty were Maruti up by 6.70%, BHEL up by 3.19%, Sun Pharma up by 3.13%, Hero MotoCorp up by 2.94% and Ranbaxy up by 2.39%. On the flip side, Hindalco down by 1.93%, Tata Steel down by 1.92%, SBI down by 1.21% and Indusind Bank down by 0.85% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 1.26%, Hang Seng up by 0.94%, KLSE Composite up by 0.66%, Jakarta Composite up by 1.84%, Shanghai Composite up by 0.47% and Nikkei 225 up by 2.70%. While, Straits Times down by 0.67% was the lone loser amidst Asian pack.