Indian equities continue lackadaisical trade; CG, Realty and Metal drags market lower

Indian equities continued its lackadaisical trade drifting lower in the late afternoon session in absence of buying among investors who overlooked the encouraging weekly inflation numbers, which showed that food inflation extended its declining streak for the fourth straight week and plummeted sharply to 6.6% for the week ended November 26. In the fight between bulls and bears to gain control over the market, bears have completely knocked out bulls giving them no chance to enter the market with bears gaining strength and marking its rally strongly towards southwards. Traders were seen selling in Capital Goods (CG), Realty and Metal sector.

Hindalco, Sesa Goa, Sterlite, Tata Steel and Jindal Steel from Metal pack were trading in red putting pressure on the markets. L&T and BHEL from Capital Goods sector were trading weak with cut of around three to more than four percent pulling markets down. Industry heavyweights RIL was trading with loss of around more than three and half percent exerting pressure on the markets. M&M, Tata Motors and Maruti from Auto space were down driving the markets down. ITC and HUL from FMCG pack were down by cut of around more than one percent inching markets lower. However, Wipro, HCL Technologies and TCS from IT counters were trading firm in green helping to push the markets up. Cipla, Sun Pharma, Hero MotoCorp and Tata Power were too firm in green giving the much needed support.

In the scrip specific development, three oil exploration stocks ONGC, Cairn India and ONGC were trading weak in red after crude oil futures fell to settle at $100.49 a barrel on the New York Mercantile Exchange on December 07, 2011. On the global front, all Asian markets were seen trading in red while the European markets were trading in green on optimistic note. Investors globally remained worried after pessimistic comments from German official punctured hopes that the ECB and European Union meetings would come up with a lasting and credible solution to the European debt trouble. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,000 and 16,600 levels, respectively. The market breadth on the BSE was in favour of declines in the ratio of 731:1868 while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 16,562.76 down by 314.30 points or 1.86% after trading as high as 16,847.82 and as low as 16,487.83. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 1.49% while Small cap sank 1.31%.

On the BSE sectoral space, there were no gainers while Capital Goods down 3.39%, Realty down 3.29%, Metal down 2.64%, Oil & Gas down 2.58% and Power down 2.23% were the major losers in the space.

Wipro up 1.91%, Cipla up 0.91%, Sun Pharma up 0.75%, Hero Moto up 0.52% and Bajaj Auto up 0.48% were the major gainers on the Sensex, while Hindalco down 4.91%, JP Associates down 4.56%, L&T down 4.19%, Sterlite down 3.88% and DLF down 3.60% were the major losers in the index.

Meanwhile, giving a major relief to the government, facing heat over the spiraling price rise, food inflation has shown a sharp decline for the week ended November 26, reflecting a decline in prices of essential items like vegetables, onions, potatoes and wheat. The annual rate of inflation, calculated on point to point basis, stood at 6.92% (Provisional) for the week ended November 26 as compared to 7.74% (Provisional) for the previous week November 19.

As per the government data, the index for ‘Food Articles’ group declined by 1.0% to 193.8 (Provisional) from 195.7 (Provisional) for the previous week due to lower prices of fish-inland and jowar (3% each), fruits and vegetables, condiments and spices, masur and urad (2% each) and fish-marine, poultry chicken, barley and moong (1% each).  However, other food products grew more expensive on an annual basis, led by protein-based items. The prices of ragi moved up by 3%, pork by 2% and gram, mutton, maize, egg and arhar by 1% each.

The index for ‘Non-Food Articles’ group rose by 0.6% to 177.7 (Provisional) from 176.7 (Provisional) for the previous week due to higher prices of flowers (15%), gaur seed and sunflower (4 % each), gingelly seed (3%), copra (2%) and fodder, linseed, rape and mustard seed, raw silk and soyabean (1% each).  However, the prices of raw jute (4%), coir fibre (3%), raw cotton (2%) and cotton seed and castor seed (1% each) declined. The non-food segment inflation was recorded at 1.37% during the week under review, as against 2.14% in the week ended November 19.

Inflation in the overall primary articles category stood at 6.92% during the week ended November 26, as against 7.74% in the previous week. However, the index for Fuel & Power having weight of 14.91%, remained unchanged at its previous week’s level of 171.8 (Provisional) and 15.53 percent (Provisional) for the week.

The S&P CNX Nifty is currently trading at 4,964.55, lower by 99.05 points or 1.94% after trading as high as 5,049.05 and as low as 4,938.85. There were 11 stocks advancing against 39 declines on the index.

The top gainers on the Nifty were Wipro up 1.95%, HCL Tech up 1.03%, Cipla up 1.00%, Sun Pharma up 0.90% and Hero MotoCorp up 0.53%.

RCOM down 5.67%, Hindalco down 5.15%, JP Associates down 5.11%, L&T down 4.36% and Sesa Goa down 4.35% were the major losers on the index.

Asian markets traded on a discouraging note, Shanghai Composite slipped 0.12%, Hang Seng declined 0.69%, Jakarta Composite shed 0.47%, KLSE Composite dipped 0.74%, Nikkei 225 dropped 0.66%, Straits Times plunged 1.84%, Seoul Composite fell 0.37% and Taiwan Weighted decreased 0.71%.

The European markets were trading in green with, France’s CAC 40 jumped 0.86%, Germany’s DAX surged 1.18% and Britain’s FTSE 100 ascended 0.53%.