Indian equities continue their lackadaisical trade

Indian equities trimmed their gains and continued lackadaisical trade, slightly above the neutral line in the late afternoon session on the back of buying by investors who started accumulating the front line counters after the brutal carnage in last three sessions. In the fight between bulls and bears to gain control over the market, bulls did manage to knock out bears but have started losing momentum while marking its rally. Traders were seen piling up positions in Metal, HealthCare and Oil & Gas sector while selling was witnessed in Consumer Durables, Capital Goods and Bankex sector.

Hindalco, Jindal Steel, SAIL, Tata Steel, Sterlite and Sesa Goa from Metal pack were trading firm in green pulling the markets up. Industry heavyweight RIL too was trading in green with gain of more than one percent. Also, Cairn India from Oil & Gas sector was in green helping the markets to move higher. Tata Motors, Bajaj Auto, Maruti, M&M and Hero MotoCorp from Auto pack was up, driving the markets higher. Axis Bank, PNB, ICICI Bank, SBI, Kotak Bank and HDFC Bank from Banking counter were trading weak in red, pulling the markets down. L&T, Siemens, Areva T&D, BEL, Suzlon Energy and Thermax from Capital Goods sector were trading in red exerting pressure on the market.

In the scrip specific development, shares of Essar group companies, Essar Shipping, Essar Ports and Essar Oil were trading in red after the Central Bureau of Investigation filed charges against five Essar group executives as part of a probe into a multi-billion-dollar telecoms case. S Kumars Nationwide was trading firm in green on reports that promoters have converted 1.24 crore warrants in to equity at Rs 63.54 per share. Gati too is trading firm in green after the company's board opened FCCB issue with a plan to raise up to $22 million.

On the global front, all Asian markets were seen trading in red while the European markets were trading on a mix note. Global credit ratings agencies Fitch and Moody’s stated that last week’s EU summit did little to avert the onerous debt debacle. They also warned to review the ratings of Euro-zone nations as efforts of EU policymakers have not been comprehensive enough to fix the immediate dangers of a significant economic downturn in the Euro-zone. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,800 and 15,900 levels, respectively. The market breadth on BSE was in favor of declines in the ratio of 894:1649 while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 15,884.29 up by 13.94 points or 0.09% after trading as high as 15,998.79 and as low as 15,771.59. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 0.80% while Small cap sank 0.75%.

On the BSE sectoral space, the Metal up 0.72%, HealthCare up 0.48%, Oil & Gas up 0.46%, Auto up 0.39% and Power up 0.22% were the major gainers while Consumer Durables down 2.22%, Capital Goods down 1.46%, Bankex down 0.89%, PSU down 0.37% and realty down 0.08% were the losers in the space.

Hindaclo up 3.12%, Tata Power up 2.13%, Jindal Steel up 1.75%, Tata Motors up 1.43% and Cipla up 1.39% were the major gainers on the Sensex, while L&T down 2.25%, ICICI Bank down 1.09%, ONGC down 1.03%, Wipro down 0.99% and JP Associates down 0.83% were the major losers in the index.

Meanwhile, the Indian rupee plunged to an all time low of 53.35 against American dollar after getting a disappointing industrial output data, slowdown in economic activities and concern over ongoing debt crisis in Europe, which may dampen global risk appetite.

The rupee has been under pressure because of the rising import bills and slower export growth, which is expected to enlarge the Current Account Deficit (CAD) to $54 billion by the end of the current financial year.

Today, in early trade the partially convertible rupee was at 53.31/32, which is 17.8% less compared to its year-high in late July. The rupee has closed down 1.5% pm December 12 at 52.84/85. The outlook for Indian rupee, which is also worst performing currency this year, remains bearish.

On the current decline in rupee, experts are of the view that rupee will be in bearish mode because there is demand but no supply and this situation will continue until the global debt crisis is resolved.

India is also experiencing an outflow from the stock market after the government data on December 11 showed October Index of Industrial Production (IIP) decline to -5.1% which lowest since June 2009. And last week government also done downward revision in its growth forecast at the time of slowdown in domestic and global demand.

Traders have the view that if Reserve Bank of India (RBI) does not intervene then rupee may touch 55 per American dollar. Analysts are of the view that India may face its worst financial crisis in decades if it fails to stop decline in rupee, as a result, RBI has difficult task of using its limited reserves to maintain the confidence of foreign investors.

Against to the belief that the RBI has been keeping its hands off the foreign currency market, as per the RBI's Current Statistics data, the RBI intervened in the foreign exchange market in a row selling $943 million in October 2011. And during September it had sold $845 million. However, did not buy any dollars.

The S&P CNX Nifty is currently trading at 4,768.80, higher by 4.20 points or 0.09% after trading as high as 4,800.25 and as low as 4,728.50. There were 28 stocks advancing against 22 declines on the index.

The top gainers on the Nifty were Hindalco up 3.24%, Tata Power up 3.22%, Dr Reddy up 2.74%, Grasim up 1.92% and Cairn India up 1.78%.

Reliance Power down 3.36%, Axis Bank down 2.55%, L&T down 2.31%, Ambuja Cement down 2.06% and Reliance Infra down 1.98% were the major losers on the index.

Asian markets largely traded on a pessimistic note, Shanghai Composite plunged 1.87%, Hang Seng sank 0.69%, Jakarta Composite shed 1.04%, Nikkei 225 slumped 1.17%, Straits Times declined 0.49%, Seoul Composite shrank 1.88% and Taiwan Weighted dropped 0.76%.

The European markets were trading on a mix note with, France’s CAC 40 declined 0.11%, Germany’s DAX jumped 0.37% and Britain’s FTSE 100 up 0.22%.