Benchmarks slip in red zone; BHEL’s Q2 earnings weighs

Markets erasing early gains have slipped into negative terrain, as relentless profit booking in absence of any positive trigger have dragged benchmark equity indices near intra-day’s low level. Bears were activated across the board after finance minister’s fiscal consolidation roadmap was unable to give any fillip to the markets, and also as traders looked cautious ahead of tomorrow’s monetary policy review by RBI, which is not expected to cut rates, has previously called for fiscal consolidation measures from the government. Disappointing earnings announcement from the PSU major BHEL too weighed on the sentiment. The power equipment manufacturer BHEL has reported nearly 10 per cent year-on-year fall in net profit for the quarter ending September 2012. Additionally, the weakness in rupee too has added pressure to the markets as it was trading near its one weak low, tailing weakness in euro which was dragged lower by continued uncertainty over Greece and Spain. On the sectoral front, Capital Goods and defensive FMCG counters were dragging the markets, on the other hand CD and Oil & Gas were giving some support, while the broader markets were still underperforming the benchmarks.

Meanwhile, it has been reported that New York Stock Exchange will be closed on Monday and provisionally on Tuesday as a safety precaution as city prepares Hurricane Sandy, may become the worst to hit the US Northeast in 100 years. European shares got off to a negative start as uncertainty over any rescue deal for Spain and worries over weak results from the region's top companies pushed stock markets lower.

Closer home, the BSE Sensex is currently trading at 18,617.69, down by 7.65 points or 0.04% after trading in a range of 18,743.41 and 18,596.99. There were 16 stocks advancing against 14 declines on the index. The overall market breadth on BSE is in the favour of declines, which thumped advances in the ratio of 1473:1210, while 130 shares remain unchanged.

The broader indices too succumbed to profit booking; the BSE Mid cap and Small cap indices were trading lower by 0.39% and 0.38% respectively.

The top gainers on the BSE sectoral space were, Consumer Durable up by 0.91%, Oil & Gas up by 0.69% and Health Care up by 0.24%. While, Capital Goods down by 1.31%, PSU and Realty were down by 0.44% each, FMCG and Power down by 0.41% each were the top losers on the sectoral space.

The top gainers on the Sensex were Wipro up by 2.60%, Hero MotoCorp up by 2.56%, Tata Power up by 2.15%, RIL up by 1.59% and Mahindra & Mahindra up by 1.15%. On the other hand, BHEL down by 5.33%, Sterlite Industries down by 2.48%, Tata Motors down by 2.22%, Hindustan Unilever down by 1.45% and Coal India down by 1.00% were the top losers on the Sensex.   

Meanwhile, with the futures markets being alleged by many as fuelling speculation in prices of food commodities, Food and Consumer Affairs Minister, K V Thomas while speaking at an international convention on 'Commodity Futures Market - Building the Nation' emphasized that, the commodity futures market maturity in the country should not only be judged by the volume of trade but also by its ability to perform the functions of price discovery and price risk management.

The convention was organized by Commodity Participants Association of India (CPAI) in association with market regulator Forward Markets Commission (FMC) focusing the proposed Forward Contract Regulation Act (FCRA), integration between spot and future market, among other issues. The changing perception will however be a major challenge and can only be achieved by the active participation of the farmers and the consumers apart from the stock exchanges and the brokers, the minister added.

Further, Ministry of Consumer Affairs Secretary Pankaj Agrawal also point out the role of the regulator in ensuring the integrity of the system along with the commodity markets, ensuring customer protection. Moreover, financial integrity of the commodity markets is considered as a major one, keeping customers’ investment safe; ensure increased participation from all, including the farmers, whose interest is most important for the market's growth.

The S&P CNX Nifty is currently trading at 5,660.30, down by 4.00 points or 0.07% after trading in a range of 5,698.30 and 5,651.65. There were 25 stocks advancing against 25 declines on the index.

The top gainers of the Nifty were Wipro up by 2.68%, Hero MotoCorp up by 2.48%, Tata Power up by 2.15%, Reliance Industries up by 1.57% and M&M up by 1.02%. While, BHEL down by 5.40%, Tata Motors down by 2.37%, HUL down by 1.58%, Bank of Baroda down by 1.42% and Coal India down by 1.23% were top losers on the index.

Asian equity indices were trading mostly in the red; Taiwan Weighted lost 0.59%, Shanghai Composite declined by 0.35%, Jakarta Composite shed 0.26%, Straits Times plunged 0.81% and Hang Seng slid 0.16% and Nikkei 225 edged lower by 0.04% while KLSE Composite up by 0.04% and Kospi Composite too was trading flat with positive bias.

European markets too got off to a negative start; with CAC 40 declining by 0.88%, DAX shedding 0.47% and FTSE 100 sliding 0.45%.