Indian equities trim gains; Nifty below 5,700 mark

Indian equities trimmed gains on account of profit booking at higher levels, but continued its firm trade in the late afternoon session. Investors have started turning cautious and are eyeing the meeting of Bahujan Samaj Party (BSP), which is scheduled for tomorrow i.e. October 10, 2012 where a final call will be taken on whether to continue its support to the UPA government or not. Traders were seen piling up position in Health Care, FMCG and Consumer Durables sector, while selling was witnessed in Auto, Oil & Gas and Power sector. Auto stocks were trading under pressure after the finance ministry reduced duty drawback rates on exports across all segments. Telecom stocks were under pressure after Empowered Group of Ministers recommended a one-time fee on existing operators for spectrum they hold beyond 4.4 MHz.

In the scrip specific development, JM Financial was trading firm on reports that the promoters are looking at selling part or complete sale and that Goldman Sachs is in talks to buy the stake. Maruti Suzuki India was trading in green after the foreign brokerage house Citigroup maintained its ‘buy’ rating on the company and raised its target price. Shriram Transport Finance Corporation was trading firm after Credit Suisse has put an outperform rating on the stock and raised the target price. Uflex is firm in green on reports that the company is looking at 2-3 major acquisitions in the US and European markets. DLF is under pressure on charges made by anti-corruption activists, which raised corporate governance issue. Kingfisher Airlines was seen locked in lower circuit limit for the seventh day in a row after the airline company encountered trouble related to safety issues and delay in employees payment.

On the global front, Asian markets were trading on a mixed note while the European markets were trading on pessimistic note. In Europe, the finance ministers are gathering to discuss how a tighter banking cooperation will overhaul the functioning of sovereign bond market and whether the member nations are ready to meet the demand from Spain if the struggling nation requests a bailout. Separately, the confidence improved in the euro zone in October and German exports rose unexpectedly in August. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,700 and 18,800 levels respectively. The market breadth on BSE was positive in the ratio of 1423:1317 while 123 scrips remain unchanged.

The BSE Sensex is currently trading at 18775.78, up by 66.80 points or 0.36% after trading in a range of 18,885.84 and 18,722.05. There were 20 stocks advancing against 10 declines on the index.

The broader indices were too trading in green; the BSE Mid cap index was up by 0.34% and Small cap index was up by 0.27%.

On the BSE sectoral space, Health Care up by 1.29%, FMCG up by 0.99%, Consumer Durables up by 0.81%, Capital Goods up by 0.77% and Bankex up by 0.46% were the top gainers. While, Auto down by 0.26%, Oil & Gas down by 0.14%, Power down by 0.12%, TECk down by 0.08% and PSU down by 0.04% were the only losers on the sectoral space.

The top gainers on the Sensex were Sun Pharma up by 1.95%, L&T up by 1.83%, Cipla up by 1.40%, Dr Reddy’s Lab up by 1.30% and ITC up by 1.05%. On the other hand, BHEL down by 2.11%, Bharti Airtel down by 2.07%, Hindalco Industries down by 1.82%, Tata Motors down by 1.41% and Bajaj Auto down by 1.18% were top losers on the Sensex. 

Meanwhile, amid struggling with reform measures to alleviate the national financial situation by triggering customer confidence, the government got another blow from the International Monetary Fund (IMF), which has forecasted that India's growth rate will slow-down below 5% this year. It also opined that the new reforms will aid the growth rate to bounce back in 2013 and sketched it to grow by 6% next year, compared to an earlier 6.5% projection.

It has blamed the corruption scandals, tough tax measures, weaker environment, looming governance issues, rupee depreciation, red tape and nationwide blackouts in the summer highlighting concerns about weak infrastructure, for trimming down the rate. It noted that the peaking current account deficit, lowering business sentiments and trimmed inflow of investments, are responsible for the low performance.

In 2011, India had recorded a growth of 6.8% however it dipped recently to 5.5%, marking its lowest in three years. It has also warned China that its economic growth is expected to weaken by 7.8% this year, amid continuing euro zone crisis and United States economic slow-down.

The S&P CNX Nifty is currently trading at 5,695.95, up by 19.95 points or 0.35% after trading in a range of 5,728.65 and 5,677.90. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 2.46%, L&T up by 2.00%, Ultratech Cement up by 1.86%, Cipla up by 1.42% and Dr Reddy’s Lab up by 1.41%. While, Bharti Airtel down by 2.14%, BHEL down by 2.08%, Hindalco Industries down by 1.99%, Tata Motors down by 1.69% and Bajaj-Auto down by 1.31% were the top losers on the index

Asian equity indices were trading mixed; Straits Times declined 0.32%, Kospi Composite lost 0.14%, Nikkei 225 plunged 1.06% and Taiwan Weighted slid 0.31%. While Jakarta Composite added 0.09%, Shanghai Composite spurted 1.97%, Hang Seng advanced 0.54% and KLSE Composite rose 0.19%, were the gainers.

The European markets were trading in red, France’s CAC 40 lost 0.07%, Germany’s DAX dropped 0.47% and the United Kingdom’s FTSE 100 descended 0.27%.