Indian equities continued its lackadaisical trade in red; Nifty below 4,800 mark

Indian equities continued its lackadaisical trade below neutral line in the late afternoon session as trade continues amid apprehension over India’s slowing growth as discouraging October IIP numbers spooked domestic sentiments as it shrank 5.1% from a year earlier, underscoring the fact that economic slowdown has taken deep roots in the Indian economy. 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 while marking its rally. Traders were seen piling up positions in IT sector while selling was witnessed in Metal, Capital Goods and Power sector.

Hindalco, SAIL, Jindal Steel, Sterlite, Tata steel and Sesa Goa from Metal sector were trading with cut of around more than one to five percent exerting pressure on the market. Tata Power, Power Grid and Reliance Power from Power sector were trading in red pulling the markets down. Tata Motors, Maruti, Bajaj Auto, M&M and Hero MotoCorp from Auto pack were down driving the markets down. SBI, ICICI Bank, Axis Bank, PNB, Kotak Bank and HDFC Bank were trading weak in red inching the markets lower. Industry heavyweight RIL was trading with cut off around more than two and half percent pulling the markets down, with the stock falling for the third straight day. However, Wipro, GAIL, Infosys and TCS were trading firm in green helping prevent the downfall.

In the scrip specific development, shares of capital goods companies ABB, BHEL, L&T, Crompton Greaves, Areva T&D India, BEML, Siemens, Alstom Projects, Bharat Electronics and Punj Lloyd fell after the latest data showed that capital goods production shrank 25.5% in October 2011 from a year earlier, compared with a 6.5% decline in September 2011. Emami plunges due to the major fire incident in Kolkata-based AMRI Hospital on Friday, December 09, 2011, in which the company holds major stake. AMRI Hospital is jointly promoted by Emami Group, which holds 66% stake, and Kolkata-based real-estate company Shrachi Group, which holds 32%. The Kolkata State Government holds a 2% stake in the hospital. Jain Irrigation Systems was trading weak in red after the company reported that a major fire broke out in its plastic pipe stocking yard situated in Jalgaon, Maharashtra on Saturday evening, December 10, 2011.

On the global front, all Asian markets were seen trading on a mix note while the European markets were trading in red on pessimistic note. Investors globally remained cautiously optimistic following the meeting of European Union leaders on Friday, where as many as 26 of the 27 member states of the EU accepted the Franco-German plan for greater fiscal unity to avert the onerous debt debacle in the Euro-zone. However, doubts emerged that such long-term steps could not be able to completely avert the crisis that has shaken Europe for two years. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,800 and 16,100 levels, respectively.

The BSE Sensex is currently trading at 16007.55 down by 205.91 points or 1.27% after trading as high as 16360.32 and as low as 15926.22. There were 3 stocks advancing against 27 declines on the index.

The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 1.14% while Small cap sank 0.95%.

On the BSE sectoral space, the IT index added 0.70% and was the only gainer while Metal down 2.43%, Capital Goods down 2.01%, Power down 1.82%, Auto down 1.81% and PSU down 1.64% were the major losers in the space.

Wipro up 2.00%, Infosys up 0.63% and TCS up 0.32% were the only gainer on the Sensex, while Hindalco down 5.04%, Bharti Airtel down 4.21%, JP Associates down 3.71%, Tata Power down 3.62% and Jindal Steel down 3.33% were the major losers in the index.

Meanwhile, Union textile minister Anand Sharma said, the slowdown in the textile sector is a matter of concern. High raw material price volatility in the last cotton season i.e. October-September 2010-11 and sharp decline in cotton prices in April 2011 had badly affected the domestic textile industry.

Sharma said 'there is a slowdown in the textile sector. It is a matter of concern. One of the reasons is the impact of global economic slowdown. As per the Confederation of Indian Textile Industry (CITI) data, of the 287 textile firms listed on the Bombay Stock Exchange, around 122 reported net losses on the first quarter of current financial year and around 166 had bad results compared to the same period last year.

The opposition parties are of the view that the dumping of foreign goods has added the woes of the weavers. On this issue Sharma said, the government will look into the complaints of dumping of silk and textile goods by foreign countries.

Opposition parties also expressed concern over the poor situation of weavers across India, on this issue Sharma said the government would take all steps to provide assistance to the weavers and help the marketing and export of the Indian textiles.

Textile minister further said, 'the cabinet had sanctioned an Rs.3, 800 crore relief package for the weavers in the country recently. Several high-powered committees and the Planning Commission were studying the problems of the weavers in detail'.

The S&P CNX Nifty is currently trading at 4,790.60, lower by 76.10 points or 1.56% after trading as high as 4,910.25 and as low as 4,778.75. There were 6 stocks advancing against 44 declines on the index.

The top gainers on the Nifty were Wipro up 1.91%, GAIL up 1.11%, Infosys up 0.68%, Reliance Infra up 0.45% and HCL Tech up 0.43%.

Hindalco down 5.26%, Grasim down 4.11%, Bharti Airtel down 4.08%, SAIL down 3.86% and JP Associates down 3.79% were the major losers on the index.

Asian markets largely traded on a mix note, Jakarta Composite surged 0.66%, Nikkei 225 soared 1.37%, Straits Times advanced 0.28%, Seoul Composite jumped 1.33% and Taiwan Weighted ascended 0.81%. On the flipside, only Shanghai Composite plunged 1.02% and Hang Seng inched lower 0.06%.

The European markets were trading in red with, France’s CAC 40 plunged 1.13%, Germany’s DAX descended 1.06% and Britain’s FTSE 100 down 0.52%.