BLEAK NOTE

Indian equity markets continue to trade on a bleak note with large cuts of close to two percent in Thursday afternoon trades. However, slight recovery in sentiments is evident as the frontline gauges have come off the day's lows hit in late morning session. The indices got some support around the psychological 16,500 (Sensex) 4,950 (Nifty) levels however, disappointing developments from the domestic front continued to pummel investors' morale. RBI deputy governor Subir Gokarn comments that RBI may not cut the cash reserve ratio since inflationary pressures are still high dissuaded investors. In addition, reports showed that according to initial estimates, India's industrial output contracted by 7% in October, dragged down by a fall in the capital goods sector. Meanwhile, investors also overlooked the encouraging weekly inflation numbers which showed that food inflation extended its declining streak for the fourth straight week and plummeted sharply to 6.6% for the week ended November 26. On the global front, pessimistic sentiments prevailed across the Asian region while the European futures too showed that the markets there would start in the red terrain. Investors globally remained worried after pessimistic comments from German official punctured hopes that the ECB and European Union meetings would come up with a lasting and credible solution to the European debt trouble. Back home, on the BSE sectoral space, Capital goods counter dived over three percent, being the top laggard in the space followed by the defensive high beta Realty pocket that sank close to three percent. Though there appeared no gainer in the sectoral space, some individual names including Wipro and Cipla traded in the positive terrain.
Moreover, the broader markets too traded on a pessimistic note with large cuts of under over a percent but were outperforming their larger peers. The bourses plunged on strong volumes of over Rs 0.60 lakh core. The market breadth on BSE was in favor of declines in the ratio of 1794:673 while 106 scrips remained unchanged.
The BSE Sensex is currently trading at 16,576.32 down by 300.74 points or 1.78% after trading as high as 16,847.82 and as low as 16,487.83. There were 6 stocks advancing against 24 declines on the index.
The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 1.37% and Small cap sank 1.33%.
On the BSE sectoral space, there were no gainers while Capital Goods down 3.28%, Realty down 2.84%, Metal down 2.61%, Power down 2.46% and Oil & Gas down 2.23% were the major losers in the space.
Wipro up 1.37%, Cipla up 0.58%, Hero Moto up 0.41%, Sun Pharma up 0.30% and Bajaj Auto  up 0.29% were the major gainers on the Sensex, while JP Associates  down 5.20%, L&T down 4.03%, Hindalco down 3.96%, Sterlite down 3.70% and DLF down 3.47% were the major losers in the index.
Meanwhile, with India's trade deficit with China, which accounts for 11.5% of India's total imports, showing little signs of coming down, the government is now planning to diversify the trade basket and focus on manufactured goods, so as to improve the trade situation to ensure greater value addition in their bilateral trade and promote the introduction of additional goods and services in their markets.
Jyotiraditya Scindia, Minister of State for Commerce & Industry said that under-investments in manufacturing and value addition have led to a severe demand-supply mismatch in India. The creation of a market for manufactured and value-added goods from China can help in curbing this mismatch.
India's imports from China in the fiscal year 2010-11 was $20 billion more than its exports to the world's second largest economy, leading to a trade deficit of $23.9 billion in the fiscal against $19.2 billion in 2009-10. However, the minister also added that there was an increase in export of some value-added goods to China as compared to the previous year.
The S&P CNX Nifty is currently trading at 4,966.70, lower by 95.90 points or 1.89% after trading as high as 5,049.05 and as low as 4,938.85. There were 9 stocks advancing against 41 declines on the index.
The top gainers on the Nifty were Wipro up 1%, Cipla up 0.75%, PNB up 0.53%, BPCL up 0.45% and Sun Pharma up 0.42%.
R Com down 5.67%, JP Associates down 5.39%, L&T down 4.24%, Hindalco down 4.14% and R Infra down 4.02% were the major losers on the index.
Asian markets traded on a discouraging note, Shanghai Composite slipped 0.18%, Hang Seng declined 0.94%, Jakarta Composite shed 0.50%, KLSE Composite dipped 0.83%, Nikkei 225 dropped 0.66%, Straits Times plunged 1.67%, Seoul Composite fell 0.37% and Taiwan Weighted decreased 0.71%.