Markets make soft start tracking weak global cues

The Indian equity markets have made a soft start tracking weak global cues. The US markets plunged overnight as the crude prices remained the center of concern while the negative news flow from the domestic as well as the global front too aided to the decline. All the Asian counterparts were trading in the red at this point of time, indicating somber investors' sentiments. Back home, sustained selling in key heavyweights and broader indices keeping the momentum on the negative side. On the sectoral front, healthcare, oil and gas and consumer durables were the top gainers in trade; on the other hand metal, software and technology were the major losers on the BSE sectoral space. Meanwhile, investors are awaiting January IIP data for some direction. The broader indices too were trading in the negative terrain. However, Fineotex Chemical and Sudar Garments got a good start and are trading with a gain of about 50% and 19%, respectively. The market breadth on the BSE was negative; there were 751 shares on the gaining side against 837 shares on the losing side while 72 shares remained unchanged.

The BSE Sensex opened at 18,248.11; about 79 points lower compared to its previous closing of 18,327.41, and has touched a high and a low of 18,288.28 and 18,200.37, respectively.

The index is currently trading at 18,327.98, down by 50.57 points or 0.28%. There were 11 stocks advancing against 29 declines on the index.

The overall market breadth started in the negative terrain, with 45.24% stocks advancing against 50.42% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.17% and 0.15%, respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.28%, Oil and Gas up by 0.22%, CD up by 0.21%, FMCG up by 0.17% and PSU was up by 0.02%. While, Metal down by 0.81%, IT down by 0.65%, TECk down by 0.56%, Auto down by 0.34% and Power down by 0.33%, were the major losers on the index.

The top gainers on the Sensex were ONGC up by 0.91%, Hero Honda up by 0.80%, ITC up by 0.58%, Bharti Airtel up by 0.35% and Maruti Suzuki was up by 0.29%.

Sterlite Industries down by 1.42%, BHEL down by 1.28%, Tata Steel down by 1.02%, Tata Motors down by 1.01% and Jaiprakash Associates down by 0.95% were the top losers 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 opened at 5,456.15; about 38 points lower compared to its previous closing of 5,494.40, and has touched a touched a high and a low of 5,478.55 and 5,450.60, respectively.

The index is currently trading at 5,474.20, down by 20.20 points or 0.37%. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were BPCL up by 1.93%, Ranbaxy up by 1.44%, Reliance Capital up by 1.11%, Sun pharma up by 1.04% and ONGC up by 0.89%.

The top losers of the index were BHEL down by 1.65%, Sterlite Industries down by 1.54%, IDFC down by 1.27%, Ambuja Cement down by 1.23% and Kotak Bank was down by 1.17%.

Asian equity indices were trading in the red; Shanghai Composite was down 8.02 points or 0.27% to 2,949.12, Hang Seng was down 182.04 points or 0.77% to 23,432.85, Jakarta Composite was down 28.91 points or 0.81% to 3,558.74, KLSE Composite was down 15.31 points or 1.01% to 1,501.60, Nikkei 225 was down 96.70 points or 0.93% to 10,337.68, Straits Times was down 25.47 points or 0.83% to 3,049.97, Seoul Composite was down 27.80 points or 1.40% to 1,953.78 and Taiwan Weighted was down by 95.22 points or 1.10% to 8,547.68.

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