Indian equities continue to trade in negative territory

Indian equities continued its lackadaisical trade in red in the late afternoon session on the back of persistent selling pressure in frontline counters and taking cues from European counterparts. The nervousness in the market is also on account that Government would bow to political pressure and announce partial rollback in recently taken policy measures. In order to balance government fiscal deficit situation, the Cabinet Committee on Political Affairs (CCPA) raised price of heavily subsidized diesel by Rs 5 per liter on Sept 13. Traders were seen piling up position in IT, TECk and FMCG sector while selling was witnessed in Capital Goods, Metal and Power sector. In the scrip specific development, GK Power and Infrastructure was seen trading in red on reports that the government may encash bank guarantees in coal blocks given to the company. Reliance Industries is trading under pressure after Kotak Institutional Equities downgraded the company to ‘sell’ from ‘reduce’, stating that the recent run-up in shares is not justified by fundamentals and citing concerns about refining margins. Deccan Chronicle Holdings (DCHL) is trading at the lower circuit limit as some of the lenders raised doubts over debt recast of the company.

On the global front, the Asian markets were trading in red while the European markets were trading on pessimistic note. Germany completed its bond offering but markets were focused on the timetable and size of the larger bailout for Spain. Spain has been averse in asking for a bailout that will force the nation to cut more government spending and increase taxes, something that the current government will like to avoid. Separately, France’s manufacturing flash purchasing managers’ index declined to 42.6 in September as against 46 in previous month and even services flash PMI dropped to 46.1 versus 49.2 MoM. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,600 and 18,400 levels respectively. The market breadth on BSE was negative in the ratio of 1074:1556 while 134 scrips remain unchanged.

The BSE Sensex is currently trading at 18,378.40, down by 117.61 points or 0.64% after touching a high of 18,443.92 and low of 18,291.93. There were 12 stocks advancing against 18 declines on the index.

The broader indices too added weakness; the BSE Mid cap and Small cap indices were trading lower by 0.55% and 0.44% respectively.

The only gaining sectoral indices on the BSE were, IT up by 1.25%, TECk up by 1.14% and FMCG up by 0.29%. While, Capital Goods down by 2.26%, Metal down by 2.08%, Power down by 1.74%, Oil & Gas down by 1.41% and PSU down by 1.02% were the top losers on the index.

The top gainers on the Sensex were TCS up by 2.10%, Bharti Airtel up by 1.18%, Infosys up by 1.01%, Bajaj Auto up by 0.69% and Wipro up by 0.68%.

On the flip side, GAIL India down by 3.66%, BHEL down by 3.56%, Sterlite Industries down by 3.34%, Tata Steel down by 2.75% and Coal India down by 2.58% were top losers on the Sensex.

Meanwhile, fair-trade regulator, Competition Commission of India (CCI), which has sent notices to 17 car makers, seeking their explanation on the alleged anti-competitive practice of selling spare parts to consumers at higher prices, is likely to schedule its hearing next month. The notices were sent to companies after the investigating arm of the competition watchdog, director general (DG) submitted an investigation report highlighting the anti-competitive practices of the companies, the name of which remain undisclosed.

Further, CCI is now pursuing the case under Section 4 of the Competition Act that relates to abuse of dominant position by enterprises. The probe was conducted after a complaint was filed with CCI last year against certain car makers for allegedly misusing dominant market position. Going by the complaint, the carmakers were making available spare parts only through their authorized dealers, who in turn sold them on high rate.

The S&P CNX Nifty is currently trading at 5,559.95, down by 40.10 points or 0.72% after trading in a range of 5,581.35 and 5,534.90. There were 18 stocks advancing against 31 declines while 1 stock remain unchanged on the index.

The top gainers of the Nifty were TCS up by 2.15%, BPCL up by 2.04%, DLF up by 1.74%, Bharti Airtel up by 1.10% and Infosys up by 1.03%.

On the flip side, GAIL India down by 3.72%, BHEL down by 3.67%, Sterlite Industries down by 3.58%, Reliance Infrastructure down by 3.36% and Sesa Goa down by 3.26% were the major losers on the index.

All Asian indices were trading in red; Shanghai Composite plunged 2.08%, Hang Seng index declined 1.20%, Jakarta Composite slid 0.65%, KLSE Composite plummeted by 1.44%, Nikkei 225 slid 1.57%, Straits Times shed 0.33%, Kospi Composite Index descended 0.87% and Taiwan Weighted too surrendered 0.70%.

The European markets were trading in red with, France’s CAC 40 descended 0.54%, Germany’s DAX dropped 0.30% and the United Kingdom’s FTSE 100 declined 0.68%.