Markets continue to trade in red in afternoon session

Indian equity benchmarks continued to trade weak in the afternoon session amid weak global cues and selling in index heavyweights such as BHEL, ITC and SSLT stocks among others. Investors also remained cautious on report that foreign institutional investors (FIIs) sold shares worth a net Rs 1234.02 crore on February 4, 2014. Selling witnessed in FMCG, oil and gas and banking stocks. However, market losses remain capped as investors were seen piling up position in auto, IT and teck stocks. Some support came in from RBI Governor Raghuram Rajan’s statement that India is now better prepared to deal with the US Fed tapering than it was six months ago. On stock specific movement, M&M, Coal India and Tata Steel were trading up by over 1.40%, while, BHEL, ITC and SSLT were trading down by over 1.90% on BSE.

Tech Mahindra gained by almost 4% to around Rs 1839 after its net profit rose 38% q-o-q basis to Rs 1,001 crore in Q3FY14. Shares of Muthoot Finance were up over 2% at Rs 132 after the Muthoot Group announced plans to set up white label automated teller machines across the country. Shares of Power Finance Corporation were up by over 2% at around Rs 141 after net profit for Q3FY14 surged 37% to around Rs 1,534 crore from Rs 1,117 crore in the corresponding quarter last fiscal. On the other hand, Jubilant FoodWorks was trading at 1,070 levels, down by more than 2%, on weak Q3 numbers and negative same-store sales growth.

On global front, Asian equity indices were trading mixed with Jakarta Composite up by 0.34% and Shanghai Composite down by 0.82%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,000 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,215 stocks traded, 1,195 stocks advanced, while 888 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,121.33 down by 90.60 points or 0.45% after trading in a range of 20,254.82 and 20,076.10. There were only 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index up by 0.62%.

The gaining sectoral indices on the BSE were Auto up by 0.77%, IT up by 0.47%, Teck up by 0.24%, Healthcare up by 0.18% and Realty up by 0.14%. While, FMCG down by 1.14%, Oil and Gas down by 0.91%, Bankex down by 0.59%, Power down by 0.49% and Capital Goods down by 0.23% were the losing indices on BSE.   

The top gainers on the Sensex were M&M up by 2.00%, Coal India up by 1.71%, Tata Steel up by 1.46%, Wipro up by 1.16% and TCS up by 0.85%. On the flip side, BHEL down by 2.05%, ITC down by 2.02%, SSLT down by 1.95%, NTPC down by 1.42% and RIL down by 1.38%.

Meanwhile, in order to provide significant benefits to the investors, Finance Minister P Chidambaram asked all financial regulators to introduce a common demat account for financial assets. Chidambaram also expressed the need for the government and the financial sector regulators to ensure robust growth and manage vulnerabilities. Referring to economic growth, Finance Minister added that although the deceleration in growth has been arrested in the second quarter of 2013-14, the factors such as structural bottlenecks and inflationary pressures are still weighing down the growth process. India's economic growth slowed to a decade low of 5 percent in the previous fiscal and 4.6% in the first half of FY14.

Finance Minister further asserted that inter-regulatory issues should be resolved in a time bound manner by the Financial Stability and Development Council (FSDC) Sub-Committee. Meanwhile, to develop the Indian financial sector, FSDC has taken many measures like development of the corporate debt market, launch of infrastructure debt funds (IDFs) and issue of new FPI regulations. The council has also prepared an assessment of key emerging issues relating to financial stability including preparedness for the impact of US tapering, re-pricing of risk, liquidity crunch and deterioration in the asset quality of banks and its impact on capital adequacy ratios.

Moreover, to facilitate issue of non-equity regulatory capital instrument by banks, the Council suggested Indian regulators like IRDA and PFRDA to reconsider their norms to enable investment by insurance companies and pension fund managers in the Basel III compliant capital instruments issued by banks. Further, FSDC also pursued the implementation of the report of the FSLRC with the view that domestic financial sector remains well-regulated, efficient and internationally competitive. 

The CNX Nifty is currently trading at 5,973 down by 27.90 points or 0.46% after trading in a range of 6,012.85 and 5,962.05. There were only 16 stocks advancing against 34 declining on the index.

The top gainers of the Nifty were M&M up by 2.25%, Coal India up by 1.72%, Tata Steel up by 1.55%, Wipro up by 1.19% and TCS up by 1.01%. On the flip side, JP Associates down by 2.18%, ITC down by 2.08%, SSLT down by 2.06%, BHEL down by 2.00% and Kotak Bank down by 1.92% were the major losers on the index.

The Asian equity indices were trading mixed; Seoul Composite up by 0.42%, Nikkei 225 up by 0.99%, Straits Times up by 0.10% and KLSE Composite up by 0.35% and Jakarta Composite up by 0.34%. While, Shanghai Composite down by 0.82%, Hang Seng down by 0.55% and Taiwan Weighted down by 2.34%.