Benchmarks trade lower tracking weak Asian counterparts

The Indian equity markets have witnessed a sharp fall in the early trade tracking weak Asian counterparts. Most of the Asian peers were trading in the negative terrain at this point of time as investors turned cautious because increasing concerns about US debt woes came on top of euro zone debt crisis after Moody's threatened to downgrade the US government "AAA" bond. Though, the US markets made a recovery overnight taking cues from the Comments of Fed Chairman Ben Bernanke. Back home, selling witnessed in all the key heavyweights barring Bharti Airtel dragged the BSE's Sensex below their crucial 18,500 mark. Moreover, Tuesday's serial bomb blasts in the country's financial capital too weighed on the sentiments. On the sectoral front, consumer durable remained the lone gainer on the BSE sectoral space while, software, technology and capital goods remained the top losers. Index heavyweight Reliance Industries was trading with a cut of half a percent too dampened the sentiments. The broader indices too were struggling to get some traction and trading in the red at this point of time. The market breadth has made a negative start; there were 932 shares on the losing side against 640 shares on the gaining side while 65 shares remained unchanged.

Meanwhile, the PSU oil marketing companies viz., BPCL, HPCL and IOC all were edged higher in the trade on the back of consistent decline in the international crude prices. While, sugar stocks like, Balrampur Chini, Bajaj Hindustan and Shree Renuka Sugar trading with a cut in a range of 2-4 percent as government stated that it will not allow more sugar exports till Diwali as the demand for the sweetener shoots up during the festive season.

The BSE Sensex opened at 18,563.69; about 33 points lower compared to its previous closing of 18,596.02, and has touched a low of 18,449.23 while high remain its opening.

The index is currently trading at 18,472.83, down by 123.19 points or 0.66%. There were just 1 stock advancing against 29 declines on the index.

The overall market breadth has made a negative start with 39.10% stocks advancing against 56.93% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.22% and 0.31% respectively. 

The only gaining sectoral index on the BSE was, CD up by 0.07%. While, IT down by 1.20%, TECk down by 0.84%, CG down by 0.71%, Power down by 0.71% and Oil and Gas down by 0.70% were the top losers on the index.

Bharti Airtel up by 0.53% remained the lone gainer on the Sensex. On the flip side, Infosys down by 1.73%, M&M down by 1.54%, ONGC down by 1.31%, Tata Power down by 1.14% and RCom down by 0.97% were the top losers on the index.

Meanwhile, despite the hike in fuel prices demand for fuel is expected to increase in India in 2012, International Energy Agency (IEA) an adviser to 28 industrialized nations, in its July report has said that India's fuel demand may rise 3.8% in 2011 led by gasoline and diesel, adding further IEA said that recent retail price hike by Asia's third largest oil consumer will not dent demand growth in the short term.

IEA in its July report had forecast India's fuel demand to rise 132,000 barrels per days (BPD) to 3.6 million BPD in 2012 despite a likely slowdown in economic activities growth. The agency has said that India's fuel demand may rise 3.7% or 124,000 BPD in 2011 to 3.46 million BPD, unchanged from its June estimates, on expectations of strong economic growth of 8.2 %.

IEA expect India's diesel demand, which accounts for about 40 percent of the total fuel demand, to rise 5.8 % in 2011 to 1.37 million bpd this year and 5.5% next year to 1.44 million bpd. Petrol demand would rise 7.6% to 363,000 BPD in 2011 and 6.7 % 388,000 BPD in 2012.

Last month, government had raised prices of diesel, kerosene and domestic cooking gas due to increase in international prices, and in May government owned oil marketing companies had increased the prices of petrol. This increased prices is less likely to affect demand for petroleum products, the union petroleum ministry too had forecast fuel sales to increase 4.6% in the current fiscal.

The S&P CNX Nifty opened at 5,569.00; about 16 points lower compared to its previous closing of 5,585.45, and has touched a high and a low of 5,572.05 and 5,541.70 respectively.

The index is currently trading at 5,549.40, down by 36.05 points or 0.65%. There were 4 stocks advancing against 46 declines on the index.

The only gainers of the Nifty were Kotak Bank up by 1.26%, Ranbaxy up by 0.66%, Bharti Airtel up by 0.39% and ACC up by 0.31%.

Infosys down by 1.47%, ONGC down by 1.32%, GAIL down by 1.18%, RCom by 1.17% and Tata Power was down by 1.03%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng was down 167.38 points or 0.76% to 21,759.50, KLSE Composite was down 1.40 points or 0.09% to 1,579.27, Nikkei 225 was down 70.88 points or 0.71% to 9,892.26, Straits Times was down 8.59 points or 0.28% to 3,079.83, Seoul Composite was down 21.95 points or 1.03% to 2,107.69 and Taiwan Weighted was down by 74.37 points or 0.88% to 8,413.69.

On the flip side, Shanghai Composite was up 3.98 points or 0.14% to 2,799.45 and Jakarta Composite was up by 3.44 points or 0.09% to 3,984.29 

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