Indian equities weaken further; IT, TECk and CG drags

Indian equities weaken further to continue its trade in red in the late afternoon session as conservative investors started selling frontline blue chip counters. Besides nervous market participants resorted to largely across the board profit booking following the disappointing start for European stock markets as the uncertainty over European debt trouble was far from over since Greek leaders were busy in cross-party talks to form a government, and with the chances for a coalition slim, a new set of elections is likely. Traders were seen piling up position in FMCG, PSU and Realty sector while selling was witnessed in IT, TECk and Capital Goods (CG) sector. Besides, lot of activity has been noticed in Realty stocks as on May 7,  the finance minister announced a roll-back of the proposal for tax deduction at source (TDS) of 1% on the sale of immovable property.

In the scrip specific development, gas related stocks like GAIL (India), Indraprastha Gas and Gujarat Gas were seen trading firm as nearly a month after the conflict between utility firm Indraprastha Gas and the regulator Petroleum and Natural Gas Regulatory Board (PNGRB), the Delhi High Court is expected to deliver its final verdict later in the day. IT exporters like Infosys, TCS, HCL tech and Wipro traded on a weak note under pressure after Cognizant announced its quarterly earnings and stunned the markets by lowering its 2012 revenue guidance by 300 basis points. Coal India was firm in green on reports that the company after two failed attempts since 2010, has now again floated a global tender for expression of interest for development of its coal blocks in Mozambique. DLF was too trading in green on reports that it is planning to sell 51% stake its life insurance joint venture DLF Pramerica Life Insurance Company to HCL Group for about Rs 500 crore to pay a part of its debt.

On the global front, the Asian markets were trading in green barring Shanghai Composite and Hang Seng while the European markets were trading in red on pessimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,100 and 16,800 levels respectively. The market breadth on BSE was positive in the ratio of 1338:1223 while 123 scrips remained unchanged.

The BSE Sensex is currently trading at 16,774.27 down by 138.44 points or 0.82% after trading as high as 16,918.31 and as low as 16,726.56. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index added 0.03% while Small cap gained 0.09%.

On the BSE sectoral space, FMCG up 1.10%, PSU up 0.97% and Realty up 0.42% were the only gainers, while IT down 2.78%, TECk down 2.14%, Capital Goods down 1.94%, Auto down 1.26% and Power down 1.12% were the major laggards in the space.

Coal India up 2.76%, Gail India up 2.32%, DLF up 2.29%, ITC up 1.56% and HUL up 1.24% were the major gainers on the Sensex, while TCS down 4.97%, BHEL down 3.04%, Tata Motors down 2.37%, L&T down 2.17% and Wipro down 2.04% were the major losers in the index.

Meanwhile, Indian government is taking copious numbers of incentives and action for promoting the exports of agricultural products including fruits and vegetables under Plan schemes of the Commodity Boards and Export Promotion Councils etc. These schemes are likely to benefit the entire horticulture industry.

Under the administrative control of the Department of Commerce, the Agricultural and Processed Food Products Export Development Authority (APEDA) is also putting various Schemes into practice to expand financial assistance to the eligible exporters; namely schemes for market development; infrastructure development; quality development; research & development and transport assistance. Besides these measures, the Ministry of Commerce & Industry has put in place various schemes namely MDA, MAI, ASIDE, Vishesh Krishi and Gram Upaj Yojana, Focus Product Scheme, Focus Market Scheme, Town of Export Excellence, etc. to encourage exports.

The government also provides assistance under Centrally Sponsored Scheme on National Horticulture Mission (NHM) for various interventions aimed at increasing production and productivity of horticultural crops for the holistic development of horticulture in the country. Production related activities include development of planting material through nurseries, area expansion, rejuvenation, integrated pest management, integrated nutrient management and creation of water resources. Besides, assistance is also being included for creating infrastructure for post harvest management and marketing.

Export of fruits and vegetables are allowed without any constraint under the Foreign Trade Policy (FTP).  The government keeps close and steady eyes on the accessibility of all agriculture products at reasonable price in domestic market and imposes restrictions on their exports as and when required.

The S&P CNX Nifty is currently trading at 5,074.15, lower by 40.00 points or 0.78% after trading as high as 5,119.95 and as low as 5,055.45. There were 16 stocks advancing against 34 declines on the index.

The top gainers on the Nifty were Coal India up 2.65%, DLF up 2.27%, GAIL India up 2.27%, ITC up 1.69% and Sun Pharma up 1.29%.

TCS down 4.96%, HCL Tech down 3.95%, JP Associates down 3.38%, BHEL down 3.11% and Siemens down 2.83% were the major losers on the index.

In the Asian space, Jakarta Composite added 0.50%, KLSE Composite ascended 0.24%, Nikkei 225 gained by 0.69%, Straits Times Index inched up 2.20%, KOSPI Composite jumped 0.54% and Taiwan Weighted amassed 0.10%. On the other hand, Shanghai Composite fell 0.12% and Hang Seng declined 0.25%.

The European markets were trading in red with France’s CAC 40 sank 1.53%, Germany’s DAX dropped 0.56% and United Kingdom’s FTSE eased 0.15%.