Weak trade persist; Sensex remains below 19,000 mark

Indian equities continued their weak trade in the late afternoon session on account of selling in frontline counters and due to weakness been observed in TECk, IT and Bankex stocks. The market mood was also unnerved on reports that the International Monetary Fund estimates Indian growth at 6% this year versus a previous forecast of 6.6%. The market pared the losses on taking positive cues from the European counterparts. Investors have started eyeing the second quarter September 2012 earnings season, which will begin around mid-October 2012 thereby providing further direction. Traders were seen piling up position in Consumer Durables, Auto and FMCG sector, while selling was witnessed in TECk, IT and Bankex sector. In the scrip specific development, Kingfisher Airlines is trading in lower circuit limit after Civil Aviation Minister Ajit Singh stated that the debt-ridden company will have to satisfy airline regulator DGCA on safety before it gets permission to fly again. Britannia Industries was trading in green on reports that the company is close to sell its 6 acre Bangalore land for approximately Rs 550 crore. Max India, Reliance Capital and Bajaj Finance were seen trading in green as the cabinet yesterday cleared the proposal for 49% Foreign Direct Investment in insurance. Emkay Global Financial Services was locked in the lower circuit limit of 10% after NSE said that the broking firm was responsible for the erroneous trades.

On the global front, Asian markets were trading in green barring KLSE Composite, while the European markets too were trading on an optimistic note. The European Central Bank left its benchmark interest rate unchanged at a record low at 0.75% for the third consecutive month. The central bank also kept its deposit rate at zero and the marginal lending facility rate at 1.5%. The Bank of England maintained the size of quantitative easing at £375 billion and the record low interest rate unchanged at 0.5%, as expected. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,750 and 19,000 levels respectively. The market breadth on BSE was negative in the ratio of 865:1889 while 105 scrips remain unchanged.

The BSE Sensex is currently trading at 18920.50, down by 137.65 points or 0.72% after trading in a range of 19137.29 and 18757.34. There were 7 stocks advancing against 21 declines while 2 stocks remained unchanged on the index.

Conversely, broader indices trimmed some losses; the BSE Mid cap and Small cap index indices were trading lower by 0.76% and 1.09% respectively.

The only gainers on the BSE sectoral space were, Consumer Durables up by 1.00%, Auto up by 0.50%, FMCG up by 0.41% and Capital Goods up by 0.19%. While, TECk down by 1.42%, IT down by 1.30%, Bankex down by 1.19%, Health Care down by 1.11% and PSU down by 0.66% were the top losers on the sectoral space.

The top gainers on the Sensex were Tata Motors up by 2.15%, Hindustan Unilever up by 1.38%, Mahindra & Mahindra up by 1.36%, Coal India up by 1.05% and L&T up by 0.69%. On the other hand, HDFC down by 4.47%, Wipro down by 1.89%, Bharti Airtel down by 1.76%, BHEL down by 1.75% and ICICI Bank down by 1.65% were top losers on the Sensex.

Meanwhile, with the aim to rejuvenate Indian economic growth, the 12th five-year plan (2012-17)  draft which amounts to Rs. 47,70,000 lakh crore with three-fold  increase in plan size, as compared to 11th plan has been approved by the Union Cabinet. The plan aims to achieve annual average economic growth rate of 8.2 %, down from 9 % envisaged earlier. It approves to infuse higher government funding for key social sectors such as health, education and sanitation.

The Planning Commission headed by Prime Minister Manmohan Singh had approved the plan earlier and now the document will be placed before the National Development Council (NDC), the apex decision making body, for the final approval. During the 11th Plan, India has recorded an average economic growth rate of 7.9 % with respect to last year’s 9% target. The projected average rate gross capital formation in the 12th Plan is 37% of GDP and the estimated gross domestic savings rate is 34% of GDP and the net external financing needed for macro-economic balance has been placed at 2.9 % of GDP. 

The 12th Plan seeks to achieve 4% agriculture sector growth during 2012-17. The growth target for manufacturing sector has been pegged at 10 %. The Commission has targeted to bring down the poverty ratio by 10%, currently, 30% of the population is below poverty line. The Union Cabinet also approved the proposal to grant international airport status to airports in Lucknow, Varanasi, Mangalore, Tiruchirapalli and Coimbatore.

The Plan also contains ambitious programmes in health, education, water resource management, infrastructure development, and a number of programmes targeted for inclusiveness, mainly the National Health Mission (NHM), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the Pradhan Mantri Gramin Sadak Yojana (PMGSY), the Integrated Child Development Scheme (ICDS) and the National Rural Livelihoods Mission (NRLM). Considerable resources are being allocated for these programmes. It also suggested beneficiary payments to a large number of schemes, which have experienced leakages in the delivery system, may be carried out through the use of the Aadhaar (UID) platform.

The S&P CNX Nifty is currently trading at 5,738.85, down by 48.75 points or 0.84% after trading in a range of 5,815.35 and 4,888.20. There were 9 stocks advancing against 41 declining ones on the index.

The top gainers of the Nifty were, Tata Motors up by 1.97%, HUL up by 1.67%, M&M up by 1.45%, Coal India up by 1.09% and L&T up by 0.79%. While, HDFC down by 4.54%, IDFC down by 3.74%, Reliance Infrastructure down by 2.95%, JP Associates down by 2.80% and Lupin down by 2.27% were top losers on the index.

All the Asian equity indices continued to trade comfortable in green, barring KLSE Composite; with Hang Seng adding 0.50%, Jakarta Composite soaring 0.87%, Straits Times advancing 0.65%, Nikkei 225 gaining 0.44%, Kospi Composite rising 0.12% and Taiwan Weighted inching higher by 0.11%%. On the flip side, KLSE Composite was down by 0.02% was the sole loser amongst the Asian pack. Meanwhile, financial markets in China remained closed.

The European markets were trading in green, France’s CAC 40 added by 0.43%, Germany’s DAX jumped 0.31% and the United Kingdom’s FTSE 100 gained 0.18%.