Indian equities continue weak trade; Nifty above 4,800 level

Indian equities trimmed its losses as investors started accumulating beaten down frontline blue chip counters. However, benchmarks continued to trade in red while investors drew some solace from reports that Reserve Bank of India’s deputy governor Subir Gokarn stating that the Reserve Bank has some room to reduce policy rates following moderate core inflation and soft global oil prices in its mid-quarter policy review on June 18. Traders were seen piling up position in Oil & Gas and Capital Goods sector while selling was witnessed in Consumer Durables, FMCG and Realty sector. In the scrip specific development, shares of fertilizer manufacturers like RCF, NFL, GSFC, Chambal Fertilizer & Chemicals and Nagarjuna Fertilizers & Chemicals were seen trading firm in green ahead of arrival of the monsoon season, which will boost demand for fertilizers. Aviation companies SpiceJet, Jet Airways and KingFisher Airlines were seen trading in green on reports that aviation ministry has called for reduction in sales tax on aviation fuel from an average 25% to a uniform 4% besides abolition of service tax on air tickets. 

On the global front, the Asian markets were trading in red while the European markets were too trading in red on pessimistic note. The German markets were trading weak as the deteriorating financial crisis in Euro-zone and sharp slowdown in China dampened sentiments and prompted investors to flee riskier asset classes like equities. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 4,850 and 15,900 levels respectively. The market breadth on BSE was negative in the ratio of 900:1580 while 129 scrips remained unchanged.

The BSE Sensex is currently trading at 15,879.08 down by 86.08 points or 0.54% after trading as high as 15,915.44 and as low as 15,748.98. There were 7 stocks advancing against 22 declines while 1 stock remained unchanged on the index.

The broader indices were trading on a negative note; the BSE Mid cap index plunged 0.78% while Small cap index dropped 0.47%.

On the BSE sectoral space, Oil & Gas up 0.77% and Capital Goods up 0.54% were the only gainers, while Consumer Durables down 3.40%, FMCG down 1.64%, Realty down 1.18%, TECk down 1.11% and Metal down 0.84% were the major laggards in the space.

ONGC up 2.76%, L&T up 1.21%, RIL up 1.02%, Tata Motors up 0.51% and Hero MotoCorp up 0.40% were the top gainers on the Sensex, while GAIL India down 3.34%, Bharti Airtel down 3.32%, DLF down 3.04%, Jindal Steel down 2.58% and HUL down 1.98% and were the major losers in the index.

Meanwhile, traffic on the Indian ports is expected to increase by 5.4% this fiscal led by an increase in traffic at the privately owned minor ports, states a report by the Center for Monitoring Indian Economy (CMIE). The main push is expected to come from the increase in the imports of crude oil and coal as their demand rises from the steel and power sectors.

It is estimated that the imports of crude will increase by 6-8% whereas those of coal shall be up by 12-15%. The think tank has also stated that there has been a dip of 6.2% in imports in the month of February in all the 13 major ports because of a fall in iron ore exports due to the Supreme Court order and lower container volumes.

Off late it has been seen that the minor ports have been eating into the business of the 13 state owned major ports due to better infrastructure and services provided by them. Also it is believed that the industry’s price regulator has a role to play in the dampening of demand for the major ports.

On a more positive note, the think tank has revised India’s GDP growth to 7.6% for the current fiscal. This is quite in contrast to near 6-6.5% expectations coming in from other agencies. The government has recently come out with a dismal number of 5.3% for the last quarter of FY12, which is the lowest growth in nine years for the Indian economy.

CMIE also expects the railway freight traffic to grow by 4.6% and breach the 1-billion tonne mark in spite of the fact that the government has raised freight charges by 15% in its latest budget. Healthy growth is expected to be come from coal, cement and iron-ore segments.

The S&P CNX Nifty is currently trading at 4,820.50, lower by 21.10 points or 0.44% after trading as high as 4,828.20 and as low as 4,770.35. There were 16 stocks advancing against 34 declines on the index.

The top gainers on the Nifty were BPCL up 3.20%, ONGC up 2.86%, JP Associates up 2.59%, Bank of Baroda up 1.32% and Ambuja Cement up 1.24%.

Cairn down 5.22%, Bharti Airtel down 3.12%, GAIL India down 3.12%, DLF down 3.04% and Tata Power down 2.90% were the major losers on the index.

In the Asian space, Shanghai Composite got pummeled by 2.73%, Hang Seng plunged 2.01%, Jakarta Composite got decimated by 4.12%, KLSE Composite slumped 1.03%, Nikkei 225 sank 1.71%, Straits Times Index shunned 1.44%, KOSPI Composite Index got thrashed by 2.80% and Taiwan Weighted got pounded by 2.98%.

The European markets got off to a weak start as France’s CAC 40 sank 0.33% and Germany’s DAX fell 1.47%. Stock markets in the United Kingdom remained closed on Monday for a national holiday.