The Indian markets continued trading sideways on persistent selling by foreign funds and retail investors amid weak trend in Asian bourses and in anticipation of a weak factory output data, scheduled for release today. This month's good core sector growth data are not likely to have much positive impact on the February IIP numbers as IIP faces concerns on the manufacturing and the capital goods segment which core data does not contribute to. The indices continued their sluggish mood in absence of positive factors, coupled with a steaming crude oil prices, keeping the market volatile since early trade. On the global front, after lower close of US markets on Friday, Asian markets too are witnessing decline. Fresh production concerns post the earthquake in Japan weighed on Nikkei Stock Average, which was down by 0.40% following losses in blue chip shares.
Back home, on the BSE Sectoral front, Realty, Auto and Oil and Gas counters are dragging the markets lower, while, stocks from FMCG, IT and CD space are showing some gains. The markets for second consecutive session are witnessing the downfall of the broader indices along with the larger peers, as both midcap and smallcap indices are trading lower. Both the barometer indices are trading below their physiological level of 19400 (Sensex) and 5900 (Nifty) mark. Meanwhile, the country's industrial output rose slower-than-expected 3.6 percent in the month of February from a year earlier. The IIP growth fell by 0.1% as compared to the month of January. The overall market breadth on BSE was in the favour in declines which outnumbered advances in the ratio of 1255:1166, while, 78 shares remained unchanged.
The BSE Sensex is currently trading at 19,398.01, down by 53.44 points or 0.27%. The index has touched a high of 19,426.30 and a low of 19,311.43 respectively. There were 14 stocks advancing against 16 declines on the index.
The broader indices too lost their grip in early trade; the BSE Mid cap index down 0.12% while, Small cap index up by 0.04%.
The top gaining sectoral indices on the BSE were, FMCG up by 1.02%, IT up by 0.31%, CD up by 0.27%, TECk up by 0.26% and CG up by 0.23%. While Realty down by 1.60%, Auto down by 1.20%, Oil and Gas down by 1.01%, Bankex down by 0.48% and PSU down by 0.34% and were the top losers on the index.
The top gainers on the Sensex were ITC Up by 1.74%, Tata Power up by 1.62%, BHEL up by 1.33%, Sterlite Industries up by 0.80% and Infosys was up by 0.72%.
On the flip side, DLF down by 2.27%, HDFC Bank down by 2.15%, Jindal Steel down by 2.11%, HDFC down by 1.85% and ONGC down by 1.84% were the top losers on the index.
Meanwhile, in a move that will significantly help fertilizer industry, the Indian government is set to increase the rates under the nutrient-based subsidy (NBS) for various fertilisers. It has already announced a hike in the benchmark import prices of di-ammonium phosphate (DAP) and muriate of potash (MOP) which is used for determination of subsidy under the NBS.
The government earlier approved import parity prices of DAP at $612 a tonne and that of MOP at $420 a tonne following the meeting of an inter-ministerial panel under the secretary, Department of Fertilisers. This compared with existing import parity prices of DAP and MOP and $580 a tonne and $390 a tonne respectively.
As a result of increase in approved prices of the two, the rates of subsidy under the NBS will also increase as there will be an automatic increase in imputed prices of phosphorus (P) and potash (K). At present, the NBS rate on P, linked to a $580-a-tonne reference price for imported DAP, is Rs 29.4 a kg. If the new prices of DAP is taken, the subsidy of P works out to be about Rs 31 a kg. Similarly, the NBS rate on K would increase to Rs 26.5 per kg as compared to Rs 24.6 prevalent presently.
The increase in NBS rates has come amidst continued spike in global crude oil prices. Brent crude prices are currently hovering around $125 a barrel following the political unrest in Middle-East that raised concerns of supply disruptions. This has resulted in increase in cost of fertilizer makers which rely substantially on imported feedstock. For instance, Indian fertilizer companies have for the current fiscal contracted import of DAP at around $612 a tonne price.
The government implemented the NBS at the start of the last financial year to rationalize its subsidy outgo and also to boost innovative fertilizer products. Under the scheme, subsidy is given against actual nutrient content in a fertilizer rather than volume of fertilizer itself. This has resulted in companies coming out with innovative soil specific products which will help boost both crop yields and margins of fertiliser players. At the same time, the scheme is expected to rationalize government's fertilizer subsidy outgo.
The S&P CNX is currently trading at 5,823.55, lower by 18.45 points or 0.32%. The index has touched a high of 5,830.30 and a low of 5804.40. There were 23 stocks advancing against 27 declines on the index.
The top gainers of the Nifty were Sun Pharma up by 2%, ITC up by 1.90%, Tata Power up by 1.29% BHEL up by 1.25% and Sterlite Industries up by 0.86%.
Siemens down by 2.81%, DLF down by 2.31%, HDFC Bank down 2.18%, HDFC down by 2.04% and Jindal Steel down 2.03% were the major losers on the index.
Asian equity indices were trading mostly in the red; Shanghai Composite gained 0.70%, Hang Seng added 0.01%, Jakarta Composite rose 0.38%.
On the flip side, KLSE Composite declined 0.59%, Nikkei 225 lost 0.40%, Straits Times slid 0.47%, Seoul Composite was down 0.22% and Taiwan Weighted shed 0.37%.
Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).
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