Indian equities continue weak trade; Nifty below 5,300 mark

Indian equities continued its weak trade below neutral line in the late afternoon session as persistent profit-booking by nervy investors kept the trend bearish. The pessimism in the market was due to European market, which was trading on a subdued note along with lack of any significant upside triggers. All eyes are now set on Q1 June 2012 corporate earnings, which will start coming from this week determining the further direction for the market. Traders were seen piling up position in IT sector while selling was witnessed in Power, Realty and Metal sector. DLF from Realty counter was seen trading weak in red exerting pressure on the market. Jindal Steel, Tata Steel, SAIL, Sterlite Industries and Sesa Goa from Metal sector were down pulling the markets lower. Industry heavyweight RIL was down with cut off around more than half percent drifting the markets lower.

On the global front, the Asian markets were trading in red while the European markets were too trading in red on pessimistic note. A meeting of European Union finance ministers is scheduled today i.e. July 09, 2012, in Brussels in which it will discuss the plans to implement various options for a banking supervisor and expanded use of bailout funds. Investors are eyeing this meeting, which was already agreed at the summit on the end of June 2012. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,400 and 17,400 levels respectively. The market breadth on BSE was negative in the ratio of 973:1705 while 108 scrips remained unchanged.

The BSE Sensex is currently trading at 17,371.15, down by 149.97 points or 0.86% after trading as high as 17,485.79 and as low as 17,343.55. There were 3 stocks advancing against 27 declines on the index.

The broader indices were too trading on a weak note; the BSE Mid cap and Small cap indices were trading lower by 1.11% and 0.97% respectively.

On the BSE sectoral space, IT up by 0.11% remained the lone gainer. On the flip side, Power down by 1.70%, Realty down by 1.66%, Metal down by 1.44%, Capital Goods down by 1.41% and Auto down by 1.20%.

TCS up by 1.16%, Dr Reddy’s Lab up 0.36% and Coal India up by 0.10% were the only gainers on the Sensex, while Jindal Steel down by 2.70%, Tata Power down by 2.56%, Bajaj Auto down by 2.54%, Hero MotoCorp down by 2.45% and Tata Steel down by 2.15% were the prominent losers on the index.

Meanwhile, as an attempt to widen the trade basket, India urged Colombia to expedite the ratification of the Double Taxation Avoidance Agreement (DTAA), which will increase the flow of investments in both the countries.

Jyotiraditya M Scindia, Minister for state for commerce and industry, who led a delegation of officials, CEOs and business delegates to Bogota, held detailed talks with Carlos de Hart, vice-minister of commerce, Colombia. Colombia has expressed interest in enhancing economic engagement with India and expressed its hopes to ratify tax treaty by year-end.

Both the countries have expressed their satisfaction on considerable substances and contents that had been added to bilateral relations during the last 5 years. Also, emphasized their mutual desire to strengthen further on the existing trade and investment relationships.

Scindia also raised the issues which is being faced by Indian companies in Colombia, particularly in petroleum and IT sector, and also requested the Colombian side for earliest resolution. The minister also appreciated the steps taken by the Colombian government in setting up of free trade zones and on providing attractive tax incentives to improve the investment climate.

Recently enforced Bilateral Investment Promotion and Protection Agreement (BIPPA) between the two countries which came into effect on June 25, 2012, had been welcomed by both the leaders.

The S&P CNX Nifty is currently trading at 5,267.80, lower by 49.15 points or 0.92% after trading as high as 5,300.60 and as low as 5,257.75. There were 5 stocks advancing against 45 declining ones on the index.

The top gainers on the Nifty were TCS up by 1.13%, Dr Reddy’s Lab up by 0.21%, Coal India up by 0.09%, Hindalco Industries up by 0.08%, and BPCL up by 0.04%.

Reliance Infrastructure down by 3.36%, JP Associate down by 3.30%, Ambuja Cement down by 2.89%, Ranbaxy down by 2.86% and Tata Power down by 2.80% were the major losers on the index.

The Asian equity indices were trading in the red; Shanghai Composite pummeled by 2.37%, Hang Seng index shrank 1.88%, KLSE Composite lost 0.03%, Strait Times plummeted by 1.43%, Kospi Composite Index plunged by 1.19%, and Taiwan Weighted declined by 0.80%.

The European markets were trading in red with, France’s CAC 40 shed 0.69%, Germany’s DAX dropped 0.20% and the United Kingdom’s FTSE 100 fell 0.43%.