WEAKNESS

Indian benchmarks have extended their losses in the late morning session. Sentiments got dampened on weak trend in the Asian trade. Trade is expected to remain range-bound until the 2013/14 Budget is unveiled on February 28, in a critical test of whether the Government will announce a plan to contain the fiscal and current account deficits .On the global front, most of the Asian markets were trading in the red with Japanese Nikkei tumbling by over a percent as exporters and construction equipment makers dropped, tugging the market slightly below a 52-month high tapped the previous day. Back home, the traders were seen piling up position in Metal, Capital Goods and FMCG, while selling was seen in Consumer Durables sector. In scrip specific development, Metal stocks like Hindalco, JSW Steel, Jindal Steel, Sesa Goa and Sterlite Industries edged lower as LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.92% to 3,482.10 on February 20, 2013. NTPC was trading in red despite the Cabinet Committee on Investment giving approval to the company to set up the 1,980 megawatts North Karanpura Super Thermal Power Plant in Jharkhand. Shriram Transport Finance' shares dropped after US private equity firm TPG Capital planned to sell part of its stake in the company to raise about $300 million. Meanwhile, the NSE Nifty and BSE Sensex were managing to trade near their psychological 5850 and 19,400 levels respectively.

The market breadth on BSE was showing negative trend with advances to declines ratio of 635:1321.

The BSE Sensex is currently trading at 19478.18, down by 164.57 points or 0.84% after trading in a range of 19554.65 and 19447.64. There were 5 stocks advancing against 25 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53% and Small cap index was up by 0.61%.

The top losing sectoral indices on the BSE were, Metal down by 1.91%, Capital Goods down by 1.51%, FMCG down by 1.10%, Bankex down by 0.92% and Realty down by 0.89% while, Consumer Durables up by 0.35% was the only gainer on the index.

The top gainers on the Sensex were Wipro up by 0.49%, Bajaj Auto up by 0.37%, Tata Power up by 0.31%, Cipla up by 0.21% and Gail India up by 0.04%.

On the flip side, Sterlite Industries was down by 2.84%,  Hindalco Industries was down by 2.42%, Jindal Steel was down by 2.23%,  Tata Steel was down by 1.86% and L&T was down by 1.84% were the top losers on the Sensex.

Meanwhile, with a view to contain the surging current account deficit, the Reserve Bank of India (RBI) has tightened norms for import of precious and semi-precious stones by imposing a limit of 90 days towards letter of credit.

The RBI, in its notification, said 'suppliers and buyers, credit (trade credit) including the usance period of Letters of Credit opened for import of precious stones and semi-precious stones should not exceed 90 days from the date of shipment'. The revised directions will come to force with immediate effect.

A letter of credit is issued by a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

As per this norm, banks are permitted to approve the Suppliers' and Buyers' credit through the letter of credit opened for import of precious stones in any form for a period not exceeding 90 days from the date of shipment. It is also applicable for jewellery made of gold, precious metal, semi-precious, any studded with diamond and precious stone. The S&P CNX Nifty is currently trading at 5,893.65 down by 49.40 points or 0.83% after trading in a range of 5,921.15 and 5,886.55. There were 9 stocks advancing against 50 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were HCL Tech up by 0.91%, Wipro up by 0.50%, Bajaj-Auto up by 0.47%, Cipla up by 0.21% and Grasim up by 0.16%.

On the flip side, Sesa Goa down by 2.59%, Jaiprakash Associates down by 2.55%, Hindalco down by 2.29%, Jindal Steel down by 2.24% and IDFC down by 2.00%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite tumbled 65.57 points or 2.74% to 2,331.61, Hang Seng declined 395.91 points or 1.70% to 22,911.50, KLSE Composite dipped 9.14 points or 0.57% to 1,604.19, Nikkei 225 dropped 156.77 points or 1.36% to 11,312.21, Straits Times contracted 18.06 points or 0.52% to 3,291.29, KOSPI Composite decreased 9.36 points or 0.46% to 2,016.00 and Taiwan Weighted was down by 57.61 points or 0.76% to 7,967.80.

On the flip side, Jakarta Composite was up by 8.91 points or 0.19% to 4,643.37.