BEARISH

Sentiments turned bearish on Wednesday's morning trade as market participants chose to take some profits off the table after the significant rise in previous session amid subdued global cues. The US markets continued their decline overnight on various profit warnings from the technology sector companies adding to concerns that the economy is losing steam. While, the Asian markets were trading lower at this point of time on worries that the global economic slowdown will hurt corporate earnings. Back home, consumer durables, capital goods and banking remained the few gainers while, selling pressure was visible across the board. Auto, FMCG and realty stocks are worst hit in the opening deals, dragging down the Sensex. Meanwhile, Financial Technologies (India) and Multi Commodity Exchange of India (MCX), the promoters of MCX Stock Exchange (MCX-SX), have rallied 4-7 percent after MCX-SX received approval from market regulator, Securities and Exchange Board of India (SEBI), to start operations as a full-fledged stock exchange. The broader indices were outperforming benchmarks and the market breadth on the BSE was positive; there were 1,020 shares on the gaining side against 666 shares on the losing side while 78 shares remained unchanged. 

The BSE Sensex opened at 17,553.97; about 65 points lower compared to its previous closing of 17,618.35, and has touched a high and low of 17,578.18 and 17,516.12 respectively.

The index is currently trading at 17,558.71 down by 59.64 points or 0.34%. There were 9 stocks advancing against 21 declines on the index.

The overall market breadth has made a positive start with 57.82% stocks advancing against 37.76% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.40% and 0.22% respectively.

The few gaining sectoral indices on the BSE were, CD up by 0.58%, CG up by 0.17% and Bankex up by 0.04%. While, Auto down by 0.62%, FMCG down by 0.59%, Realty down by 0.52%, Oil and Gas down by 0.48% and TECk down by 0.35% were the top losers on the index.

The top gainers on the Sensex were SBI up by 1.03%, Tata Steel up by 0.57%, NTPC up by 0.47%, Jindal Steel up by 0.40% and L&T up by 0.34%.

On the flip side, Bharti Airtel was down by 1.38%, ONGC was down by 1.09%, Wipro was down by 1.03%, Tata Motors was down by 1.01% and Tata Power was down by 0.98% were the top losers on the Sensex.

Meanwhile, the auto maker - General Motors commonly known as GM has recommended hike of Rs 1 per litre in diesel instead of charging 5% levy on diesel cars. According to the company, this will result in more income rather than increasing tax and distorting the market.

GM Vice President, Corporate Communications, P Balendran said, "all original manufactures have recommended that right approach will be to increase diesel prices in small doses and reducing petrol rates gradually so that market distortion is addressed and the sector performs well."

By adding further, Balendran said Society of Indian Automobile Manufacturers (SIAM) has recommended a hike in diesel prices by Re 1 per litre as it would help government earn Rs 6,000 crore revenue. By increasing Rs 1 per litre the government will earn three times more as compared to 5% increase in levy on vehicle tax on diesel cars will only resulted in an income of Rs 2500 crore.

Balendran claimed that the Planning Commission has conducted a study and the report has come out saying that privately owned passenger cars consume only 1.03 percent of the total diesel consumed in the country so there is a recommendation that levy of additional diesel tax is regressive step for industry.  As there is a vast disparity of prices of diesel and petrol across the country there is 85% demand for diesel cars while demand for petrol cars has come down to 15%, which normally remained around 50-50 percent levels in India.

In the recent past petrol had reached as high as Rs 78 per litre level while diesels have remained stable around Rs 40-45 per litre. So a better idea would be to increase of diesel and on the flip side there should be an effort to bring down the price of petrol. If this results in sluggishness of industry the government will earn more revenue. According to estimate by GM this year the car market is expected to grow between 6 to 8%. Previous month GM sold 7,364 units in India  among which 5286 units were of its popular brand Beat including its 4,800 diesel units and 700 Travera.

As strike at vendor's plant is nearing to end, GM is hopeful of making delivery of 2,000 Travera in this month as said by Balendran. In the next one month time Traveras production shall reach from 1,800 to 2,500. GM has planned to bring out two new model cars Sail and Enjoy MPV, in heavy vehicle volume category, in the fourth quarter of this fiscal.

The S&P CNX Nifty opened at 5,315.25; about 30 points lower compared to its previous closing of 5,345.35, and has touched a high and a low of 5,334.80 and 5,314.25 respectively.

The index is currently trading at 5,327.95, lower by 17.40 points or 0.33%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were BPCL up by 1.24%, SBI up by 0.72%, Sesa Goa up by 0.67%, Power Grid up by 0.62% and Tata Steel up by 0.51%.

On the flip side, Wipro down by 1.24%, Bharti Airtel down by 1.18%, Tata Motors down by 1.05%, Hindalco down by 1.02% and Tata Power down by 0.99%, were the major losers on the index.

Most of the Asian equities were exhibiting the choppy trade; Shanghai Composite slumped 4.68 points or 0.22% to 2,159.75, Hang Seng index fell 74.96 points or 0.39% to 19,321.40, Nikkei dipped 44.83 points or 0.51% to 8812.61, Kospi Composite lost 6.62 points or 0.37% to 1822.66 and Taiwan Weighted Index slumped 14.03 points or 0.21% to 7236.86.

On the other hand KLSE Composite climbed 5.43 points or 0.33% to 1629.72, Straight Times was up by 1.92 points or 0.06% to 2966.28 and Jakarta Composite surged by 5.43 points or 0.12% to 4014.58.