Benchmarks peel off some losses; weekly food inflation data eyed

Local equity markets after sulking in early trade have now recovered some of its losses as investors indulged in bargain buying. The mood on the local bourses has been marred by the overnight steep losses in the US and European markets in the wake of bad economic statistics. Meanwhile, weakness in the Asian Indices too weighed on the sentiment. On the global front, the Standard & Poor's index, like other major Wall Street indices, fell more than 2%, its biggest drop since August 11 as the growth in the US manufacturing sector slowed sharply in May, with the Institute for Supply Management's index of national factory activity falling to its lowest level since September 2009. Meanwhile, the Asian indices were caught in deep sea of red with political uncertainty looming over Tokyo, with a former prime minister joining the swelling ranks of ruling party rebels trying to oust Prime Minister Naoto Kan, raising the risk that a no-confidence vote will pass in parliament on Thursday forcing him to quit.

Backhome, traders also chose to stay on the sidelines ahead of the release of weekly food inflation data as slew of macro-economic data in the past have slaughtered the marketmen's expectation thereby raising concerns that India's growth story may meet with few head bumps. On the BSE Sectoral front, stocks from Fast Moving Consumer Goods, healthcare and Consumer Durable counters have helped the 30 share index -Sensex-on Bombay Stock Exchange (BSE) trim some of its losses, while the stocks from rate sensitive sectors- Bankex, Realty and Auto counters are languishing at the bottom. The broader indices too have dipped in red and are currently injured with a cut of over 0.50% each. The overall market breadth on BSE is vastly in the favour of declines which have thrashed advances in the ratio of 1340:829, while 85 shares remained unchanged.

The BSE Sensex is currently trading at 18,492.59, down by 116.22 points or 0.62%. The index has touched a high and low of 18,497.25 and 18,390.57 respectively. There were 10 stocks advancing against 20 declines on the index.

The broader indices too were bleeding profusely; the BSE Mid cap and Small cap indices were down by 0.55% and 0.50% respectively. 

The only gaining sectoral indices on the BSE were, FMCG up by 0.88%, HC up by 0.77%, CD up by 0.71%. While, Bankex down by 1.49%, Realty down by 1.25%, Auto down by 1.12%, Metal down by 0.99% and CG down by 0.76% were the top losers on the index.

The top gainers on the Sensex were HUL up by 3.13%, Cipla up by 1.04%, NTPC up by 1.00%, ONGC up by 0.78% and Bajaj Auto up by 0.63%.

On the flip side, ICICI Bank down by 2.69%, Tata Motors down by 2.59%, Mahindra & Mahindra down by 1.89%, DLF down by 1.63% and JP Associates down by 1.51% were the top losers on the index.

Meanwhile, the Index of Six core industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 276.5 (provisional) in April 2011 and registered a growth of 5.2% (provisional) compared to 7.5% registered in April 2010 and 7.4% in March 2011. During April-March 2010-11, six core industries registered a growth of 5.8% (provisional) as against 5.5% during the corresponding period of the previous year. The decline can be mainly attributed to weakness in cement output and lower finished steel production.

Crude Oil production having weight of 4.17% in the IIP registered a growth of 11% (provisional) in April 2011 compared to a growth rate of 5.1% in April 2010. The Crude Oil production registered a growth of 11.9% (provisional) during April-March 2010-11 compared to 0.5% during the same period of 2009-10.

Petroleum refinery production having weight of 2.00% in the IIP registered a growth of 6.6% (provisional) in April 2011 compared to growth of 5.3% in April 2010. The Petroleum refinery production registered a growth of 3.0% (provisional) during April-March 2010-11 compared to (-) 0.4% during the same period of 2009-10. Coal production with weight of 3.2% in the IIP registered a growth of 2.9% (provisional) in April 2011 compared to growth rate of (-) 2.9% in April 2010. Coal production grew by (-) 0.1% (provisional) during April-March 2010-11 compared to an increase of 7.9% during the same period of 2009-10. 

Though, Cement production having a weight of 1.99% in the IIP registered a negative growth of (-) 1.1% (provisional) in April 2011 compared to 8.8% in April 2010. Cement Production grew by 4.5% (provisional) during April-March 2010-11 compared to an increase of 10.5% during the same period of 2009-10.

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 4.3% (provisional) in April 2011 compared to 12.9% (estimated) in April 2010. Finished (carbon) Steel production grew by 8.2% (provisional) during April-March 2010-11 compared to an increase of 5.4% during the same period of 2009-10. During the same period, marginal decline was witnessed in Electricity generation, having weight of 10.17% in the IIP, registering a growth of 6.8 % (provisional) in April 2011 compared to growth rate of 6.9% in April 2010. Electricity generation grew by 5.6% (provisional) during April-March 2010-11 compared to 6.2% during the same period of 2009-10.

The government has recently decided to include natural gas and fertilisers in the list of core sector infrastructure industries. The new series, which will have data for eight key sectors, is likely to be released on June 10. The move will increase the weight of the core sector to about 37 percent in the IIP.  The S&P CNX Nifty is currently trading at 5,555.40, down by 36.60 points or 0.65%. The index has touched a high and low of 5,558.50 and 5,521.95 respectively. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were HUL up by 3.19%, Sun Pharmaceuticals up by 2.20%, SAIL up by 2.14%, Reliance Capital up by 1.80%, Cipla up by 1.12%.

Tata Motors down by 2.77%, Sesa Goa down by 2.42%, IDFC down by 2.01%, Mahindra & Mahindra down by 1.90% and DLF down by 1.79% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite descended by 1.96%, Hang Seng declined 1.59%, KLSE Composite dropped 0.23%, Nikkei 225 plunged 1.66%, Straits Times shed 0.53%, Seoul Composite trimmed 1.21% and Taiwan Weighted was down by 0.69%. Meanwhile, Jakarta Composite remained closed on account of Ascension day holiday.

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