Benchmarks trim losses; trade continues in red

Indian equities trim losses but continued to trade in red hovering near the highest point of the day in the late afternoon session on account of buying at lower levels. The sentiments were on negative note from the early trade tracking weak cues from Wall Street on disappointing economic data. The street took note of Department of Economic Affairs (DEA) Secretary Arvind Mayaram's statement asserting that representatives of Fitch expressed satisfaction on the country’s overall macroeconomic situation. Traders were seen piling positions in Consumer Durables, FMCG and PSU stocks while selling was witnessed in IT, TECK and Metal sector stocks. In scrip specific development, Engineers India was trading firm as the company gears up for its follow-on public offer (FPO) to hit capital market on February 6. Divi's Laboratories was trading in green after its net profit increased by 51.84% to Rs 219.02 crore, largely due to a 25.24% increase in total income in Q3 December 2013 over Q3 December 2012 to Rs 697.18 crore.

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 6,000 and 20,200 levels respectively. The market breadth on BSE was negative in the ratio of 978:1340 while 138 scrips remained unchanged.

The BSE Sensex is currently trading at 20136.96, down by 72.30 points or 0.36% after trading in a range of 20,139.54 and 19963.12. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading on a mixed note; with Mid Cap up by 0.10% and Small Cap indices were trading lower by 0.13%.

The top gaining indices on BSE were, Consumer Durables up by 0.90%, FMCG up 0.69%, PSU up 0.33%, Power up 0.30% and Bankex up by 0.11%. On the flip side, IT down by 2.26%, TECK down by 1.43%, Metal down by 0.67%, Health Care down by 0.36% and Capital Goods down by 0.28% were the top losing indices on BSE.   

The top gainers on the Sensex were Bharti Airtel up by 2.68%, Tata Motors up by 2.58%, NTPC up by 2.50%, ITC up by 1.42% SBI up by 1.29%. On the flip side, M&M down by 3.90%, BHEL down by 2.90%, TCS down by 2.85%, Gail India down by 2.56% and Wipro down by 1.89%.

Meanwhile, Finance Minister P Chidambaram has indicated that the government might make minor adjustments in excise duties and service tax rates in the vote-on-account (interim budget) to be presented in Parliament on February 17. The vote-on-account is not a full-fledged Budget and no major changes by way of amendments could be made to it.

By adding further, Chidambaram added that changes required in the excise rates or service tax rates will be made without an amendment. The prevailing economic slowdown may prompt the government to experiment with indirect tax cuts in the hope that resultant savings could boost the margins of companies.

It is expected that government can cut excise and service tax rates from the current 12% to 10% proposed earlier in order to provide some impetus to industrial growth. However, during the first nine months of 2013-14, Indirect tax collection grew just 6.2% to Rs 3,55,003 crore as compared to the year earlier. The government had projected a 20% growth in indirect taxes this fiscal to Rs 5.65 lakh crore. Domestic industries also expect a five-year extension of the excise duty exemption given to the industry in states such as Himachal Pradesh and J&K that expires in May 2014.

The CNX Nifty is currently trading at 5,979.40 down by 22.40 points or 0.37% after trading in a range of 5,982.30 and 5,933.30. There were 20 stocks advancing against 29 declining while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.71%, Tata Motors up by 2.57%, NTPC up by 2.50%, Cairn India up by 2.42% and ITC up by 1.47%. On the flip side, HCL Tech down by 4.47%, M&M down by 3.91%, TCS down by 2.80%, BHEL down by 2.69% and Gail India down by 2.53% were the major losers on the index.

The Asian equity indices were trading in red; Seoul Composite down by 1.72%, Nikkei 225 down by 4.18%, Hang Seng down by 2.89%, Straits Times down by 0.82%, KLSE Composite down by 1.31% and Jakarta Composite up by 0.59%. Markets in Shanghai and Taiwan remained closed for Lunar New Year holidays.

The European markets were trading in red; France’s CAC 40 was down 0.31%, Germany’s DAX lost 0.95% and UK’s FTSE 100 dropped 0.70%.