Indian equity add losses; trade hovers near lowest point of day

Indian equity markets added losses to continue its weak trade hovering near the lowest point of the day in the late afternoon session on account of selling in frontline counters due to weak global set-up. The sentiments on the street were also cautious after President Pranab Mukherjee expressed concern over persisting difficult economic conditions, stating that the past year has been a difficult one for the economy. Addressing the joint sitting of Parliament at the start of the Budget Session, Mukherjee stated that Europe is in recession and there is a need to address the impact of growth hurdles. Indian economy is experiencing slower growth which is the consequence of global and domestic factors. Traders were seen piling some position in Consumer Durables sector while selling was witnessed in Metal, Realty and Bankex sector.  In the scrip specific development, Videocon Industries was trading firm on reports that state-run ONGC is in talks to buy Videocon’s 10% stake in Mozambique’s Rovuma basin. ITC is trading in red after the Gujarat state government increased the VAT on cigarettes to 30% from 25% in the state government’s FY 2014 budget presentation.

On the global front, all the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,900 and 19,400 levels respectively. The market breadth on BSE was negative in the ratio of 796:1845 while 138 scrips remain unchanged.

The BSE Sensex is currently trading at 19,358.90, down by 283.85 points or 1.45% after trading in a range of 19,554.65 and 19,358.06. There were 2 stocks advancing against 27 declines while 1 stock remains unchanged on the index.

The broader indices too continued to reel under pressure; the BSE Mid and Small cap indices were trading lower by 1.38% and 1.46% respectively.

The top losing sectoral indices on the BSE were, Metal down by 2.92%, Realty down by 2.40%, Bankex down by 1.85% Capital Goods down by 1.85%, and Oil & Gas down by 1.75% while, Consumer Durables (CD) up by 0.18% was the sole gainer on the index.

The top gainers on the Sensex were Bharti Airtel up by 0.26% and Gail India up by 0.12%.

On the flip side, Jindal Steel was down by 3.91%, Tata Steel down by 3.67%, Hindalco Industries down by 3.63%, Sterlite Industries down by 3.57% and ICICI Bank down by 3.10%, were the top losers on the Sensex.

Meanwhile, in the upcoming Budget session, a bill to replace Directorate General of Civil Aviation (DGCA) by a new aviation regulatory body -- the Civil Aviation Authority (CAA) - with full operational and financial autonomy is expected to be tabled in Parliament. Civil Aviation Minister Ajit Singh said, ‘we are preparing a cabinet note on creating the CAA. We have sent a draft of the proposal to the law ministry and hope that we will be able to table the bill in the second half of this budget session itself.’

Disappointed over the past performance of the DGCA, Ajit Singh said that despite the increase in air passenger, aircraft movement over the past six years, the strength of DGCA, which is the regulatory body in the field of civil aviation, has gone up only in a marginal manner mainly due to the cumbersome recruitment process under the UPSC.

On the other hand, the proposed CAA, with full functional and financial autonomy, would be able to recruit its own staff, decide on their pay structure and the powers to fix and collect fees for rendering services like safety oversight and surveillance of air navigation services. As per the minister, the estimated cost of the CAA would be around Rs 112 crore and will be self financing. CAA will have a separate fund that would finance its entire expenses and will also get budgetary support.

Regarding the organization set up, Ajit Singh said that the proposed CAA would have a Chairperson, a Director General and 7-9 members, including five whole-time members. All of them would be appointed by the Centre on the recommendation of a Selection Committee headed by the Cabinet Secretary.

The S&P CNX Nifty is currently trading at 5,862.10, down by 80.95 points or 1.36% after trading in a range of 5,921.15 and 5,860.60. There were 4 stocks advancing against 46 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 0.43%, Bajaj-Auto up by 0.11%, Gail India up by 0.10% and Cipla up by 0.05%.

On the flip side, Jaiprakash Associates down by 3.95%, Jindal Steel down by 3.87%, Tata Steel down by 3.45%, IDFC down by 3.44% and Sesa Goa down by 3.27% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite plunged 2.97%, Hang Seng declined 1.72%, KLSE Composite dipped 0.01%, Nikkei 225 dropped 1.39%, Straits Times contracted 0.77%, KOSPI Composite decreased 0.47%, Taiwan Weighted was down by 0.89% and Jakarta Composite slid by 0.18%.

The European markets were trading in red; France’s CAC 40 lost 1.47%, Germany’s DAX dropped 1.46% and United Kingdom’s FTSE 100 edged lower by 1.23%.