Benchmark indices trade near their day’s low

The benchmark equity indices are trading near their day's low in late afternoon session  after an earthquake hit Japan, dampening the sentiment already affected by weak economic data and tensions in Saudi Arabia. Meanwhile, all the other Asian markets settled in red while European markets were also trading in negative and US index futures also trading lower as Tsunami warning has widened to include rest of Pacific coast, including Australia and South America, after massive earthquake in Japan. Back home, the 30-share BSE Sensex and the 50-share NSE Nifty were trading near their physiological levels of 18,100 and  5,400 respectively. The broader markets too declined by over one percent. The market breadth on the BSE was in favour of declines in the ratio of 1550:1037 while 110 scrips remained unchanged. Most of the BSE sectoral indices were in the red. Metal stocks fell the most. Many IT companies have operations in Japan reacting to this the IT index fell 1.36%. TCS more that fell 2% and Infosys declined nearly one per cent.

Meanwhile, the Index for Industrial Production (IIP) has shown smart recovery in the month of January, coming at better than expected 3.7% after hitting a 20-month low of 1.6% in December. Higher exports, Consumer Goods sector growth has helped the ramp up in the numbers. However, December growth has been revised to 2.5%.

The BSE Sensex tumbled 174.45 points or 0.95% at 18,153.53. The index touched a high and a low of 18,368.43 and 18,063.29 respectively.

The BSE Mid-cap and Small-cap indices declined 1.02% and 1.16%, respectively.

In the BSE sectoral space Metal down 1.84%, Power down 1.62%, TECk down 1.50%, Auto down 1.48% and CG down 1.42% were the major losers; while Oil & Gas up 0.50% and Fast Moving Consumer Goods (FMCG) up 0.07% were the only gainers in the BSE sectoral space.

The top losers on the Sensex were BHEL down 3.71%, TCS down 2.68%, Sterlite Inds down 2.60%, JP Associates down 2.43% and Cipla down 2.28%.

On the other hand, ONGC up 2.29%, Tata Power up 0.57%, HUL up 0.40% and RIL up 0.16% were the only gainers on the index.

Meanwhile, in view of foreign institutional investors (FII) pulling their money out of India, rising inflation and widening of current account deficit (CAD), the government is looking for ways to attract foreign direct investment (FD) in various fields. The government is considering allowing foreign direct investment in multi-brand retailing as part of a slew of measures to make India more attractive to overseas investors and also as this move will go a long way in containing inflation, a major cause for concern of both consumers and the government. The government is thinking of opening up this gate gradually as introduction of FDI is feared to be eating into the business of small stores. Though the Finance Minister (FM) was silent on allowing FDI in multi-brand retail, the current scenario which is worsening day by day may push the government to take some steps in this regard in coming few months. Meanwhile, the Economic Survey, tabled in Parliament last month, had also suggested gradual opening up of retail to FDI with the initial go ahead limited to a few cities as FDI in a phased manner beginning with metros and incentivizing the existing retail shops to modernize could help address the concerns of farmers and consumers.

Though the government is keen on allowing FDI in this sector and as the move is at the stage of discussion with political clearance yet to be accorded to the proposal, any major steps in this direction before elections are unlikely, because they face opposition from 'kirana' stores -- small mom-and-pop shops -- which account for the majority of India's retail market and are valuable vote banks for politicians.

India's $450 billion retail sector is among the fastest growing in the world, but it remains heavily regulated, with strict limits on foreign investment. Just 6% of retail trade is organized. Multi-brand global retail giants like Wal-Mart, Metro and Tesco have shown interest to invest in the segment in the country. At present, government allows 51% FDI in wholesale cash-and-carry where global players such as Wal-Mart and Carrefour are only allowed to sell to bulk customers such as hotels, canteens and local retailers.

The S&P CNX Nifty shed 51.15 points or 0.93% at 5,443.25. The index touched high and low of 5502.70 and 5,411.55.20 respectively.

The top gainers on the Nifty were ONGC up 2.32%, Ranbaxy Lab up 1.46%, BPCL up 1.13% HUL up 0.58% and Sun Pharma up 0.56%.

On the other hand, BHEL down 3.75%, Sterlite Inds down 2.88%, TCS down 2.75%, Rel Infra down 2.58%, Rel Capital down 2.42% were the major losers on the index.

United Spirits is currently trading at Rs 1,083.00, up by 3.90 points or 0.36% as  the company  has considered and approved the amalgamation of the wholly owned subsidiary - Chennai Breweries (CBPL) into United Breweries (UBL). The approval of amalgamation was taken at their meeting held on March 11, 2011.The shareholders of CBPL will receive 17 equity shares of UBL each for every 30 equity shares of CBPL. The share exchange ratios were recommended by two independent valuation experts Grant Thornton and SSPA & Co.

The other Asian markets settled in the red; Shanghai Composite dipped 0.73%, Hang Seng dropped 1.55%, Jakarta Composite shed 1.27%, KLSE Composite slipped 1.40%, Nikkei 225 plunged 1.72%, Straits Times trimmed 1.04%, Seoul Composite declined 1.31% and Taiwan Weighted plummeted 0.87%.

European markets were trading in red. FTSE shed 0.22%, DAX declined 0.81% and CAC-40 trimmed 0.88%.

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