Indian equities trim losses; trade continues in red

Indian equities trim losses but continue to trade weak in red in the late afternoon session as conservative investors sold off their frontline blue chip counters. The sentiments continue to remain somber as India's industrial production unexpectedly contracted 3.5% in March for the first time in five months, indicating marked slowdown in Asia’s third largest economy. Traders were seen piling up position in Bankex, Auto and Realty sector while selling was witnessed in Health Care, IT and FMCG sector. Hectic activity was noticed in metal shares as weaker-than-expected Chinese economic data for April reignited worries of slowdown in the world's second biggest economy.

In the scrip specific development, power generation major NTPC has touched 52-week low, with the stock extending yesterday's slide triggered by weak Q4 results. DLF, the country’s largest realty firm was active on the bourses on reports that the company has set up a core team of five to six people to focus on the process of sale of non-core assets. Chettinad Cement Corporation hit the upper circuit limit after the company announced that its board would meet on May 15, 2012 to consider delisting proposal. IRB Infrastructure tanked on the bourses extending its fall past seven trading days following the alleged involvement of it chairman and managing director Virendra Mhaiskar and three members in a murder. Sintex Industries hit three year low after reporting 46% year-on-year (y-o-y) fall in its consolidated net profit at Rs 91 crore for the fourth quarter of FY12. Usha Martin slipped after the company posted a decline of 97.36% in net profit which came in at Rs 3.61 crore for the fiscal ended March 31, 2012.

On the global front, the Asian markets were trading in red while the European markets were too trading in red on pessimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,000 and 16,400 levels respectively. The market breadth on BSE was negative in the ratio of 888:1692 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 16,392.29 down by 27.76 points or 0.17% after trading as high as 16,403.25 and as low as 16,233.76. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 0.53% while Small cap plummeted 0.80%.

On the BSE sectoral space Bankex up 0.82%, Auto up 0.74%, Realty up 0.47% and Consumer Durables up 0.04% were the only gainers, while Health Care down 1.52%, IT down 1.04%, FMCG down 0.96%, TECk down 0.67% and Power down 0.45% were the major laggards in the space.

Bajaj Auto up 2.73%, Tata Motors up 2.69%, BHEL up 2.03%, SBI up 1.86% and DLF up 1.69% were the major gainers on the Sensex, while Sun Pharma down 3.48%, Maruti Suzuki down 2.19%, Tata Power down 2.01%, ONGC down 1.62% and ITC down 1.57% were the major losers in the index.

Meanwhile, announcing that formation of additional foodgrain storage was a main concern of the government, Minister of Food, Consumer Affairs and Public Distribution K V Thomas said the government was taking all necessary steps to expand storage facilities.

A storage capacity of almost 64 million tonnes is presently available with Food Corporation of India, which includes about 46.5 million tonnes of covered capacity. Further capacity of 15.2 million tonnes is being developed under the Private Entrepreneurs Guarantee scheme through the private entrepreneurs and Central and State Warehousing Corporations, out of which 2.8 million tonnes capacity has been developed up to March 2012 and another nearly 5.2 million tonnes is expected to be completed by the end of fiscal 2012-13, and the balance by 2013-14.

While addressing a national workshop on 'Best Practices in TPDS and Food Fortification, organized by Department of Food and World Food Programme, Thomas said, the government has also approved creation of a capacity of 2.0 million tonnes in silos. In North Eastern states, it has finalized a scheme for creation of total storage capacity of 5.40 lakh tonnes.

By adding further he said, ‘with the expanding foodgrains production and its procurement by the government, it becomes incumbent of the government to ensure its safe storage. Our government is taking all necessary steps to expand storage facilities.’

On the front of procurement of foodgrains as well there has been steady increase. While the average annual procurement of rice and wheat during 2000-01 to 2006-07 was 38.22 lakh tonnes i.e. 24.3% of the average production, it increased to about 57 million tonnes during 2007-08 to 2010-11 i.e. 32.2% of the production.

The S&P CNX Nifty is currently trading at 4,955.20, lower by 10.50 points or 0.21% after trading as high as 4,960.75 and as low as 4,906.15. There were 20 stocks advancing against 30 declines on the index.

The top gainers on the Nifty were Jaiprakash Associates up 3.32%, Tata Motors up 2.77%, Bajaj Auto up 2.61%, Axis Bank up 2.21% and BHEL up 2.12%.

Ranbaxy down 4.44%, Sun Pharma down 3.75%, Tata Power down 2.36%, Maruti Suzuki down 2.28% and ITC down 2.13% were the major losers on the index.

In the Asian space, Shanghai Composite declined 0.63%, Hang Seng plunged 1.30%, Jakarta Composite slipped 0.64%, KLSE Composite eased 0.18%, Nikkei 225 shed 0.63%, Straits Times Index dropped 0.78%, Kospi Composite plummeted 1.43% and Taiwan Weighted slumped 1.10%.

The European markets were trading in red with France’s CAC 40 sank 0.40%, Germany’s DAX eased 0.33% and United Kingdom’s FTSE eased 0.31%.