Local equity markets trade lower; Realty and metal drags

Local equity markets are trading lower in late morning session as selling pressure persisted in selected realty, metal and bank counters. Meanwhile, majority of the other regional peers were trading in negative keeping the local sentiment weak. On the other hand US index future is showing mild gains in the screen trade. Back home the benchmark indices are continuing to trade below key psychological levels. The Sensex has broken and continue to trade below the 18,000 mark while the Nifty has drifted below the 5,350 mark which was the low of August 2010.In sectoral space, Realty stocks have declined sharply, dragging the BSE Realty index down by about 2.66%, Consumer Durables down 2.37% with key stocks from that space suffering sharp losses, metal and banking counters too are down by around 2% while the BSE IT and Teck counters were showing some resistance. Besides several large cap stocks, a number of stocks from midcap and small cap sections have posted sharp losses, the BSE Mid-cap and Small-cap indices slid 1.58% and 1.77%, respectively. The overall market breadth was in negative, the losers outpaced the gainers in the ratio of 1878:636, while, 106 shares remained unchanged on the index.

The BSE Sensex dropped 170 .31 points or 0.94% at 17,866.88. The index touched a high and a low of 18,141.51 and 17863.91, respectively.

The BSE Mid-cap and Small-cap indices slid 1.58% and 1.77%, respectively.

All the BSE sectoral spaces were trading in the red barring IT up by 0.18% and TECk up by 0.05%. Realty was down by 2.66%, Consumer Durables down 2.37%, Metal down 1.76%, Bankex down 1.75% and Capital Goods down by 1.52% were the major losers.

The top gainers on the Sensex were Tata Power up 1.75%, Bajaj Auto up 1.55%, Cipla up 1.38%, HDFC up 0.95% and TCS up 0.61%.

M&M down 3.82%,JP associates up 3.22%, ONGC down 3.09%, Tata Steel down 2.88% and  Reliance communication down 2.55% were the top losers on the index.

In a move that will help the policy makers, particularly the Reserve Bank of India (RBI) to better gauge the underlying inflationary momentum in  the Indian economy, the government will release new consumer prices indices (CPIs) on February 18, said an official release from the Planning Commission.

The government will release new series of CPIs for rural, urban and combined (rural + urban) with base 2010 (January-December =100) for January 2011 onwards, said the Central Statistical Organization (CSO). These indices will be available for five major groups, namely, food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous.

At present, India has four different CPIs and a wholesale prices index (WPI). There remains significant difference within the CPIs themselves and even higher difference when the CPIs are compared with the WPI. As such, the policy makers have to reconcile the differences between different indices, which sometimes are too large to be explained or to be factored in, for instance, by the RBI.

In this wake, the WPI has been getting much higher attention of the central bank when it comes to policy making. This is against the international best practice of assessing inflation by the CPI. The main reason for RBI following the WPI is the relatively broader coverage (447 items with a weight of 57% for manufactures), and its frequent and timely availability, as compared to the complicated mode of calculation of the CPIs and long delays in release.

Further, the current CPI numbers do not encompass all the segments of the population in the country and do not reflect the true picture of underlying price momentum. As such, the government has been looking to replace or augment the CPIs by some composite measure which will now be in form of the composite rural-urban CPI to be released on Feb 18.

Initially, the CSO proposes to release provisional indices for the period of one year. These provisional numbers will be subsequently revised and final numbers with complete data for all-India and also for all the States/Union Territories would be released with a time lag of two months. The CSO expects that the data reporting will be considerably improved and there may not be any need to bring out separate provisional numbers after December, 2011. As such, indices for January 2012 onwards along with annual inflation rates are likely to be released with a time lag of one month only.

The S&P CNX Nifty declined 56.85 points or 1.05% to 5,339.15. The index touched a high and a low of 5432.35 and 5,338.80, respectively. 

The top gainers of the Nifty were BPCL up 1.75%, Tata power up 1.50%,Bajaj Auto up 1.33%, Cipla up 1.19% and HDFC up 0.94%.

The top losers of the index were  JP Associates down 5.06%,M&M down 4.06%%, ONGC down 3.75%, Tata Steel  down 3.15% and Axis Bank was down 3.11% .

Majority of the regional peers were trading in the red; Hang Seng declined 0.46%, Jakarta Composite dropped 0.60%, Straits Times declined 0.29%, Seoul Composite shed 0.58% and Taiwan Weighted slid 0.37% while, KLSE Composite was up by 0.28% and Nikkei 225 added 0.41%.

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0nAyMLBwc7A==