Local benchmarks slid deeper into red zone

Indian equity markets after getting a muted start have enticed additional weakness on the back of stocks belonging from the Fast Moving Consumer Goods, Power and health Care counters, which were dragging the indices lower. Prolonging previous session’s consolidation mode, Indian equity markets continued to trade with jitters after S&P hurling a BRIC, warned that India may lose its rating and also ahead the release of April month’s IIP data. 30 scrip sensitive index, was trading lower over 0.25% to trade sub 16650 bastion, while the widely followed 50 share index, Nifty, too sliding in negative terrain, had lost its 5050 fortress. On the flip side, stocks from Consumer Durable, Oil & Gas and Auto counters showcasing resilience, capped bourses losses to some extent.

On the global front, Asian markets reversed previous day's hefty gains as a European bailout for Spain's debt-stricken banks failed to persuade investors that the spread of the debt crisis in Europe will be arrested. The US future indices, too were showcasing a downtick in the screen trade.

Closer home, India's annual industrial output growth measured by index of industrial production (IIP), showed a negligible growth of 0.1% for the month of April 2012 versus a contraction of (-) 3.5% in March, but remained way below the street expectation of 1.8%. The indices of industrial production for the mining, manufacturing and electricity sectors for the month of April 2012 stand at 124.4, 176.2 and 152.7 respectively, with the corresponding growth rates of (-)3.1%, 0.1% and 4.6% as compared to April 2011. The overall market breadth on BSE remained in the favour of declines which thumped advances in the ratio of 1027: 856, while 117 shares remained unchanged.

The BSE Sensex is currently trading at 16,625.97, lower by 42.04 points or 0.25%. The index has touched a high and low of 16,666.58 and 16,553.47 respectively.  There were 10 stocks advancing against 20 declines on the index.

The broader indices slipped into the red zone at this point of time; the BSE Mid cap and Small cap indices were trading lower by 0.14% and 0.07% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.07%, Oil & Gas up by 0.16%, Auto up by 0.12%, Metal up by 0.07% and Bankex up by 0.07%. While, FMCG down by 0.75%, Power down by 0.61%, HC down by 0.47%, IT down by 0.40% and CG down by 0.36% were the top losers on the index.

The top gainers on the Sensex were Sterlite Industries up by 1.58%, Hindalco Industries up by 0.96%, Bajaj Auto up by 0.62%, Gail India up by 0.58% and Cipla up by 0.55%.On the flip side, Wipro down by 2.32%, Dr Reddy down by 2.22%, Tata Power down by 1.25%, Jindal Steel down by 1.22% and ITC down by 1.22% were the top losers on the Sensex.

Meanwhile, growth in sales of passenger cars in India hit seven month low levels in May as higher borrowing costs and fuel prices dissuaded buyers from owning new four wheelers. With no aggressive softening of interest rates by RBI, higher running cost and recent price hikes owing to the excise duty hike in Budget, it has increasingly become difficult for car manufacturers to keep up the sales momentum as demand has been adversely impacted.

The body also underscored that sales of even diesel vehicles, which used to have a lot of demand has tapered off, sending signals to the government that its recent plans to tax diesel vehicles more would further deteriorate sentiments and the overall demand will suffer all the more. According to the latest data released by industry body Society of Indian Automobile Manufacturers (SIAM), domestic car sales in May stood at 1,63,229 units as compared to 1,58,809 units in the same month last year, posting a growth of 3.10 percent, the slowest growth since October last year when car sales witnessed a decline of 23.77 percent.

Sales of broader passenger vehicles segment expanded at 8.42 percent during April-May 2012 over same period last year while that of Vans sub-segment registered a de-growth of 5.31 percent during April-May 2012 as compared to same period last year. The only sub-segment that boasted of strong growth rate in the passenger vehicles segment was Utility Vehicles, which expanded by a whopping 51.05 percent thanks to some stylish and aggressively priced new launches.

Overall domestic production of automobiles across categories in May 2012 was 1,783,384 vehicles as against 1,613,872 in May 2011, indicating an increase of 8.15 percent year on year. While, total domestic sales of vehicles across categories expanded by 10.26 percent to 1513,032 units in May as against 1369,070 units in the same month last year.

The SIAM data also showed that total domestic two-wheeler sales in the previous month grew by 11.40 percent to 11,92,688 units from 10,70,603 units in May 2011. Of the total two wheeler sales, motorcycle sales stood at 8,87,634 units growing only 7.24 percent from 8,27,746 units in the same month last year. However, the scooter overall sales showed strong growth of 34.40 percent to 235,185 units from 174,985 units.

Moreover, commercial vehicles sales expanded by 9.12 percent to 62,025 units during the month, as compared to 56,841 units in the same month a year-ago. Of the total commercial vehicles sales, sales of the Medium and Heavy Commercial Vehicles dropped sharply by 10.58 percent to 22,227 units during the month compared to 24,858 units in May last year while light commercial vehicle sales continued to expand at strong rate of 24.43 percent to 39,798 units in May 2012 from 31,983 units in May 2011. In the three-wheeler category, sales fell by 3.32 percent to 37,184 units from 35,988 units in the same month last year.

The S&P CNX Nifty is currently trading at 5,039.60, down by 14.50 points or 0.29%. The index has touched a high and low of 5,051.80 and 5,015.15 respectively. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Sterlite Industries up by 1.87%, Sesa Goa up by 1.51%, BPCL up by 1.02%, Punjab National Bank up by 1.04% and Hindalco Industries up by 0.91%.

On the flip side, Wipro down by 2.20%, Dr Reddy down by 2.06%, HCL Technology down by 1.83%, Ranbaxy down by 1.50% and ITC down by 1.29%, were the major losers on the index.

All the Asian equity markets were trading in the red; Shanghai Composite declined by 0.80%, Hang Seng Index slid 0.77%, Jakarta Composite slipped 0.75%, KLSE Composite shed 0.22%, Nikkei 225 plummeted 1.11%, Straits Times Index dropped 0.53%, KOSPI Composite Index sank 0.74% and Taiwan Weighted slumped 0.80%.