Sensex, Nifty trades marginally in red; Cipla shoots up 6%

Indian equities have trimmed gains and were trading in red in the late morning session. While on the global front, Asian markets were trading mixed with majority of indices trading lower by half to one percent. Though, the Chinese market was trading up, but the nation’s manufacturing expanded at the slowest pace in eight months, the PMI unexpectedly fell to 50.1 in July from 50.2 in June. However, traders have taken encouragement with country’s leaders pledging to keep adjusting policies to ensure stable economic growth this year. On the political front, P Chidambaram has been appointed as the new Finance Minister, he took over the portfolio from Prime Minister Manmohan Singh who had been holding charge temporarily after Pranab Mukherjee. Meanwhile, government in view of the draught like situation has doled out relief package which includes subsidised diesel for irrigation, funds to ensure drinking water, seed subsidy for re-sowing crops and augmentation of fodder supply. Traders were seen piling up position in Realty, HC and Power sector, while selling was witnessed in TECk, IT and Banking sector. Heath care sector was trading in green, Cipla has reported a surge of 58.19% in its net profit at Rs 400.76 crore for the quarter, as compared to Rs 253.34 crore for the same quarter in the previous year.  Total income of the company has increased by 23.85% to Rs 2011.25 crore for the quarter under review as compared to Rs 1623.98 crore for the quarter ended June 30, 2011.The NSE Nifty and BSE Sensex were managing to hold their psychological 5200 and 17200 levels respectively. The market breadth on BSE was positive in the ratio of 1395:638 while 82 scrips remained unchanged.

The BSE Sensex is currently trading at 17219.82 down by 16.36 points or 0.09% after touching a high of 17281.76 and a low of 17189.16. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index was up 0.70%, while Small cap index was up 0.84%.

On the BSE sectoral space, Realty up by 1.13%, HC up by 0.86%, Power up by 0.78%, CG up by 0.59% and CD up by 0.38% while TECk down by 0.56%, IT down by 0.56%, Bankex down by 0.32%, Metal down by 0.25% and FMCG down by 0.16% there were losers on the index.

Cipla up by 5.26%, BHEL up by 1.60%, Bajaj Auto up by 1.45% Tata Power up by 1.33% and SBI up by 1.10% were the gainers on the Sensex, while Coal India down by 3.28%, Bharti Airtel down by 1.38%, HDFC Bank down by 1.31%, Wipro down by 0.93% and TCS down by 0.76% were the major losers in the index.

Meanwhile, with clear signs that weak global economic conditions were dragging down export orders, manufacturing activity grew at a slower clip in July on the back of power outages and a moderation in new order inflows, which continued to rise but at the weakest rate since last November as new export orders fell for the first time since October 2011. Dollar appreciation could be mentioned as a driver behind falling export business. But the impact of unusual severe blackouts of the last two days of July, which hit grids in a dozen northern states, home to around 670 million people, was not included in the survey.

According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at the slowest pace in the past eight months to 52.9 in July, 2012 as against 55.0 in the previous month of 2012. However, a figure above 50 signals increase in production while, a number below 50 indicates contraction.

Underscoring the global effect of the current downturn caused by the euro zone's 2-1/2 year old sovereign debt crisis, the new export orders sub-index fell to 49.7 from 52.3 in June, its first sub-50 reading in nine months. Further, manufacturing firms in India signaled rising charges during July. Although the output price inflation persisted in the sector for 35 successive months, but the rate of increase during July slowed from the reading in the previous month. Meanwhile, quantity of purchases in the Indian manufacturing sector increased moderately, with the pace of increase being the slowest since September 2011.

Since, manufacturing accounts for around 15 percent of India's gross domestic product, so a slowdown would not augur well for Asia's third-largest economy, already struggling with its weakest growth in almost a decade. Further, reasoning deficient monsoon, deceleration of industrial growth, RBI, in its first quarter monetary policy review 2012-13, revised downward the GDP forecast for the current financial year to 6.5 per cent from 7.3 per cent.  

The S&P CNX Nifty is currently trading at 5,225.65, down by 3.35 points or 0.06% after trading in a range of 5,240.45 and 5,212.65. There were 27 stocks advancing against 22 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were Cipla up by 4.96%, JP Associates up by 2.79%, Reliance Infra up by 2.42%, Ambuja Cement by 2.36% and BHEL up by 1.79%. While, Coal India down by 2.80%, BPCL down by 1.53%, HDFC Bank down by 1.35%, Bharti Airtel down by 1.22% and  TCS down by 1.05% were the major losers on the index.

Asian indices were trading on mix note; Nikkei 225 down 1.00%, Taiwan Weighted down  0.07%,  Kospi Composite Index down  0.30%  and  Jakarta Composite  down by 0.66%, while Hang Seng index was up by 0.16%, Straits Times was up 0.20%,  KLSE Composite up 0.07%, and Shanghai Composite up 0.99% were the gainers .