Benchmark equity indices remain choppy;BSE Sensex shed 56.33 points

The Benchmark equity indices are trading choppy in the late-morning session as funds and retail investors are looking keen to book some profits ahead of the New Year and have offloaded their positions amid weak trend in the Asian region, as majority of the regional peers were trading in red. On the other hand Dow futures were trading positive in the screen trade at this point of time. Back home in sectoral space Consumer Durables (CD), Metal, FMCG, Healthcare (HC) and Capital Goods (CG) stocks were inching higher in trade. Whereas Auto, Oil & Gas , Public Sector Undertaking (PSU) , Bankex counters and Information Technology (IT)  were subdued in trade. The broader indices were also trading negative .The market breadth on the BSE was slightly positive; the gainers outpaced the losers in a ratio of 1337:1264 while 106 shares were unchanged.

The BSE Sensex shed 56.33 points or 0.28% to 19,926.55. The index touched a high and a low of 19,978.60 and 19,880.36, respectively.

The BSE Mid-cap and Small-cap indices shed 0.06% and 0.02%, respectively.

The main gainers in the BSE sectoral space were Consumer Durables (CD) up 0.64%, Metal up 0.58%, FMCG up 0.55%, Healthcare (HC) up 0.03% and Capital Goods (CG) up 0.07% .

The main losers in the BSE sectoral space were Auto down 1.08%, Oil & Gas down 0.58%, Public Sector Undertaking (PSU) down 0.56%, Bankex down 0.53%, and Information Technology (IT) down 0.20%.

The major gainers on the Sensex were Hindalco Inds up 1.84%, Sterlite Inds up 1.22%, ITC up 1.11%, Wipro up 0.64% and Tata Steel up 0.49%.

The major losers on the index were Tata Motors down 2.21%, Maruti Suzuki down 1.42%, BHEL down   1.37 %, ICICI Bank down 1.34% and ONGC down 1.29%.

The government has finally come to the rescue of tyre industry after it lowered the import duty on natural rubber on Thursday amidst surging prices of the commodity. Rubber prices in Indian as well as global markets have been on the rise and hovering close to record high levels in recent months because of a tight demand-supply scenario.

On Thursday the natural rubber prices touched a new record at Rs 207 per kg in Kerala on concerns over the domestic supply. There have been untimely rains in Kerela which have raised concerns on domestic output. Besides, global production too has been hit by weather related problems in some of the key producer countries. The two factors together have been fuelling rubber prices.

The tyre industry in this wake has been demanding a cut in import duty for quite some time. The government has been levying a 20% duty on import of natural rubber. However, the user industry has been contending that since there was significant demand supply gap in the domestic market, 100,000 tonne of the commodity should be allowed to be imported at lower import duty. After consultations with the industry bodies, the government has now cut down the import duty to 7.5%. The new levy will only be applicable for shipments of up to 40,000 tonne until 31 March.

Already the top tyre makers including the likes of Apollo Tyres, MRF, JK Tyres and Ceat have all raised prices by 10-20% since the start of current calendar year to offset the rising costs. Strong demand side fundamentals have helped the companies pass the rise in cost to consumers but the extremely high competition in the industry have also ensured that only the bare minimum necessary hike is implemented in prices.

Analysts however feel that the duty cut has come at a late stage and now the international prices are not much different from those in India. As such, fresh imports are not likely to be entered in immediately. However, as the lower duty is valid till end of the fiscal, tyre makers will look to ensure themselves against a steeper cut in domestic production by importing some mount of rubber in the March quarter depending on how local and global prices more going forward.

The S&P CNX Nifty trimmed  17.20 points or 0.29% to 5,962.80. The index touched a high and a low of 5,977.20 and 5,940.25, respectively. 

The top gainers on the Nifty were Siemens up 3.14%, Hindalco Inds up 1.80%, Suzlon  up 1.72% ,Sesa Goa up 1.54% and Sun Pharma up 1.27% .

The top losers on the index were Tata Motors down 2.54%, BPCL down 2.48%, Maruti Suzuki down 1.53%  Sail down 1.50 % and IDFC down 1.47%.

Majority of the regional peers were trading in red .Shanghai Composite slid 0.51%, Hang Seng declined  0.30%, KLSE Composite trimmed  0.16%, Seoul Composite decreased 0.39% and Taiwan Weighted was down by 0.43% while Straits Times gained 0.19%. 

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