Benchmarks trade in red; Nifty slips below 6000 mark

Indian equities trim gains to continue trade below neutral line in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were on positive note after India’s wholesale prices-based inflation (WPI) eased to an eight-month low of 5.05% in January, helped by moderating food prices. Investors are however maintaining cautious approach as analysts expected that it was too early to draw comfort from January inflation number. Traders were seen piling positions in IT, TECK and Oil & Gas stocks, while selling was witnessed in Metal, Realty and Auto sector. Hectic activity was witnessed in telecom stocks after auctions of telecom spectrum concluded on Thursday, after 68 rounds of bidding. In scrip specific development, Amtek Auto was trading in green on reporting robust Q3 numbers. Future Retail shares were trading firm after company reported a net profit of Rs.21.7 crore for the quarter ended December. India’s largest lender State Bank of India (SBI) was trading in red after its net profit fall 34.2% year-on-year to Rs 2,234.34 crore in the quarter ended December 2013.

On the global front, the Asian markets barring Nikkei 225 and Straits Times were trading in green, while the European markets were trading on a mixed 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 1007:1368 while 144 scrips remained unchanged.

The BSE Sensex is currently trading at 20172.71, down by 20.64 points or 0.10% after trading in a range of 20313.02 and 20149.01. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.38%, while Small cap index was down 0.42%.

The gaining sectoral indices on the BSE were IT up by 0.88%, TECK up by 0.70%, Oil & Gas up by 0.38% and Consumer Durables up by 0.27%. While, Metal down by 1.16%, Realty down by 0.73%, Auto down by 0.73%, Capital Goods down by 0.64% and HealthCare down by 0.53% were the top losing indices on BSE.   

The top gainers on the Sensex were Tata Motors up by 1.53%, NTPC up by 1.50%, TCS up by 1.37%, Infosys up by 1.13% and Reliance Industries up 0.63%. On the flip side, Bajaj Auto down by 4.09%, BHEL down by 2.87%, Cipla down by 2.57%, SBI down by 2.39% and Hero MotoCorp down by 2.39%.

Meanwhile, in other good news, after Retail inflation numbers India's main inflation gauge, based on monthly WPI, too eased to eight month low at 5.05% in January as compared to 6.16% in December and 7.31% during the corresponding month of the previous. The build up inflation rate in the financial year, so far, stood at 5.17% compared to a build up rate of 5.78% in the corresponding period of the previous year. However, the reading for November WPI inflation was unchanged at 7.52%.

The decline in headline inflation figure was on account of ease in food articles, which declined by 2.7 percent to 233.6 (provisional) from 240.1 (provisional) for the previous month that dragged Primary article index, which occupies 20.12% weight in the overall headline index, lower by 1.9 percent to 238.9 (provisional) from 243.6 (provisional) for the previous month. Meanwhile, the index for ‘Non-Food Articles’  group rose by 0.1 percent to 216.0 (provisional) from 215.8 (provisional) for the previous month.

Further, Fuel & Power, having weight of 14.91%, too rose by 0.7 percent to 212.8 (provisional) from 211.3 (provisional) for the previous month due to higher price of LPG (5%), aviation turbine fuel and petrol (2% each) and furnace oil, kerosene, high speed diesel and bitumen (1% each).

However, the index of Manufactured Products, which occupies 64.97% of weight in the overall index, rose by 0.5 percent to 152.6 (provisional) from 151.9 (provisional) for the previous month, which took the inflation of manufacture products at three months high level.

However, in a sign of worry, Core WPI, edged higher at 3% as compared to 2.8% (M-o-M basis). Nevertheless, eight months low January WPI, besides bringing some relief to RBI would bring some cheer to Congress party-led ruling alliance, which faces an uphill battle in a general election due by May. Notably, the government in its Mid-Year review terming high inflation as biggest risk to India’s growth outlook, pressed the need for bringing down the headline inflation below 6%.

Thus, the latest reading makes a case for RBI maintaining a status quo stance in its upcoming monetary policy review on April 1, 2014. Persistently high inflation prompted RBI Governor Raghuram Rajan to raise interest rates last month, the third hike since September, even though economic growth has been stuck around a decade-low of 4.5 percent for four quarters.

The CNX Nifty is currently trading at 5,989.55, down by 11.55 points or 0.19% after trading in a range of 6,033.30 and 5,984.60. There were 20 stocks advancing against 30 declining ones on the index.

The top gainers of the Nifty were Kotak Bank up by 1.60%, Tata Motors up by 1.53%, NTPC up by 1.46%, TCS up by 1.42% and Infosys up by 1.15%. On the flip side, Bajaj-Auto down by 4.08%, BHEL down by 2.93%, SBI down by 2.92%, Cipla down by 2.51% and Hero MotoCorp down by 2.22% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite added 0.83%, Hang Seng increased by 0.60%, Jakarta Composite surged 0.33, KLSE Composite gained 0.14%, Seoul Composite rose 0.69% and Taiwan Weighted was up by 0.54%. On the flip side, Nikkei 225 slumped by 1.53% and Straits Times was down by 0.02%.

The European markets were trading on a mixed note; France’s CAC 40 was down 0.06%, Germany’s DAX added 0.12% and UK’s FTSE 100 dropped 0.05%.