Indian equities exhibit weak trade; Nifty holds 5,100 mark

Indian equities continued its lackadaisical trade in red in the late afternoon session on absence of buying in frontline counters. Traders were seen piling up position in Capital Goods, Realty and Power sector while selling was witnessed in Oil & Gas, IT and Consumer Durables sector. The lack of buying conviction among investors is due to absence of any positive clues. The next major trigger for the market is Q1 June 2012 corporate earnings, which will start trickling from the second week of July 2012. In the scrip specific development, industry heavyweight RIL was seen trading weak in red with a cut of around more than three percent after its Canadian partner Niko Resources reported that total proved plus probable natural gas reserves at the company’s KG D6 block in India have slumped by almost 51% to 377 billion cubic feet equivalent. Three public sector oil marketing companies HPCL, BPCL and IOC attracted lot of activity after US oil futures sank to their lowest level in eight months on June 20, 2012.

On the global front, the Asian markets were trading in red barring Nikkei 225 while the European markets were too trading in red on pessimistic note. Though flash PMI of France came in better than expected at 46.1 against 44.8 in May but was unable to give any support to the markets in the region as there is expectation that preliminary report may show European services and manufacturing contracting at the fastest pace in three years. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,100 and 16,800 levels respectively. The market breadth on BSE was neutral in the ratio of 1271:1216 while 134 scrips remained unchanged.

The BSE Sensex is currently trading at 16,836.89, down by 59.74 points or 0.35%. The index has touched a high 16,888.34 and low 16,799.63 of respectively. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading on a positive note; the BSE Mid-cap index was up by 0.19% while Small-cap index rose by 0.23%.

The top gaining sectoral indices on the BSE were Capital Goods up 1.32%, Realty up 0.90%, Power up 0.62%, PSU up 0.48% and Bankex up 0.25%. While, Oil &Gas down 1.33%, IT down 1.17%, Consumer Durables down 1.06%, TECk down 0.87% and Metal down by 0.58% were the top losers on the index.

The top gainers on the Sensex were BHEL up 2.16%, Tata Power up 1.51%, Hero MotoCorp up 1.49%, L&T up 1.35% and ONGC up 1.10%. On the flip side, RIL down 3.47%, TCS down 2.89%, Hindalco Industries down 1.67%, Mahindra & Mahindra down 1.40% and Jindal Steel down 1.26% remained the top losers on the Sensex.

Meanwhile, in a bid to meet Public Distribution System (PDS) requirement, the Union food ministry has asked state governments to lift PDS food-grains needed for at least six months and build intermediate storages to ease pressure on Food Corporation of India’s (FCI) godowns. The storage capacity of FCI is 64 million tonnes and at present, the stock is about 82-83 million tonnes. However, despite shortage of storage, losses and storage damages have been cut to merely 0.006 percent or less than one lakh tonnes out of the total stock. While, five year back the loss was 2.5 percent.

The country expected to have bumper production of wheat and rice this year. The wheat production is estimated at about 902.30 lakh tonnes with procurement estimated at 370 lakh tonnes for the public distribution system during the current year while, rice output will be over 1,034.1 lakh tonnes with procurement at about 353.15 lakh tonnes.

Further, the freight constituents of the food-grain price have been waived by the Ministry under the open market sale scheme. These measures are intended at bringing down the bulging buffer stocks that are over 82 million tonnes.

The S&P CNX Nifty is currently trading at 5,102.55, down by 18.00 points or 0.35%. The index has touched a high and low of 5,122.80 and 5,093.45 respectively. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were JP Associates up 2.52%, BHEL up 1.98%, DLF up 1.98%, Hero MotoCorp up 1.39%, and L&T up 1.27%. On the flip side, Reliance Industries down 3.50%, TCS down 3.12%, Ambuja Cement down 3.02%, ACC down 2.63% and Cairn India down 2.49% were the major losers on the index.

The Asian equity indices were mostly trading in the red; Jakarta Composite down 1.33%, KOSPI Composite Index down 0.79%, Taiwan Weighted down 0.76%, Straits Times Index  down 0.92%, Hang Seng Index down 1.30%, Shanghai Composite down by 1.40% and KLSE Composite  was down  0.24% were the losers. On the flip side, Nikkei 225 up 0.82% was the only gainer.

The European markets were trading in the red, France’s CAC 40 dropped 0.51%, Germany’s DAX descended 0.60% and the United Kingdom’s FTSE 100 descended 0.57%.