Benchmarks extend losses; Realty, Consumer Durables drag

Indian equity benchmarks extended losses to continue their weak trade in the late afternoon session led by selling in frontline counters. The sentiments were on pessimistic as violence escalated in Iraq with US President Barack Obama threatening US military strikes in Iraq against Sunni Islamist militants who have surged out of the north to menace Baghdad and want to establish their own state in Iraq and Syria. Traders were seen piling up positions in IT, while selling was witnessed in Realty, Consumer Durables and Power sector stocks. In scrip specific development, Edelweiss Financial Services was trading in green after ace investor Rakesh Jhunjhunwala picked up one crore shares of the company for an estimated Rs 55 crore through the open market route. ADF Foods was trading firm after promoters stated that they plan to raise holding in company to 60%.

On the global front, the Asian markets were trading mixed note, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,600 and 25,300 levels respectively. The market breadth on BSE was negative in the ratio of 797:2163 while 77 scrips remained unchanged.

The BSE Sensex is currently trading at 25282.47, down by 293.74 points or 1.15% after trading in a range of 25688.31 and 25200.09. There were 5 stocks advancing against 25 stocks declining on the index.  

The broader indices were trading in red; the BSE Mid cap index was down by 2.35%, while Small cap index was down by 3.00%.   

The top losing sectoral indices on the BSE were Realty down by 4.70%, Consumer Durables down by 3.78%, Power down by 3.45%, India Infrastructure Index down by 3.07% and PSU down by 2.99% were the top losing indices on BSE while IT up by 0.12% was the lone gainer on the index.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 0.66%, Infosys up by 0.47%, Sun Pharma up by 0.29%, Mahindra & Mahindra up by 0.16% and HDFC up by 0.15%.

On the flip side, Hindalco Industries down by 5.33%, NTPC down by 3.99%, Axis Bank down by 3.86%, Tata Steel down by 3.76% and Tata Power down by 3.04% were the top losers. 

Meanwhile, in order to make Inflation-linked bonds more attractive for retail investors, the Reserve Bank of India (RBI) is likely to revamp the structure of inflation-indexed bonds (IIBs). The RBI’s Deputy Governor H R Khan has stated that the central bank has circulated a proposal to government containing measure on how to revamp IIBs structure to attract maximum investments.

The RBI’s Deputy Governor asserted that as retail investors want regular payouts from their investments in IIBs, the proposed features will help to provide regular income and higher tax-adjusted returns to investors. The central bank also proposed to offer a quarterly interest payout on inflation-indexed bonds as against the present interest payment on maturity.

In spite of the RBI’s various measure to enhance investments in IIB’s, recently launched Inflation Indexed National Savings Securities-Cumulative (IINSS-C) has failed to attract retail investors. The factors like lack of awareness among investors, the option of only cumulative interest payment (interest is cumulated and paid on maturity-10th year), absence of tax benefits than other competing investment avenues and recent fall in retail inflation can be attributed to the poor response. 

However, to attract maximum investments, the RBI has already doubled the maximum limit for investment in inflation-indexed bonds to Rs 10 lakh per annum for individuals. Further, the investment limit for institutions like Hindu undivided family (HUF), Charitable Trusts, Education Endowments and similar institutions was increased from Rs 5 lakh to Rs 25 lakh per annum.

The CNX Nifty is currently trading at 7556.50, down by 93.40 points or 1.22% after trading in a range of 7678.50 and 7531.15. There were 7 stocks advancing against 43 stocks declining on the index.   

The top gainers on Nifty were HCL Technologies up by 2.05%, Tech Mahindra up by 0.89%, Sun Pharma up by 0.59%, Dr. Reddy’s Lab up by 0.45% and Infosys up by 0.29%.

On the flip side, DLF down by 7.51%, Hindalco Industries down by 5.76%, BPCL down by 4.57%, NTPC down by 4.12% and Jindal Steel down by 4.04% were the top losers.   

Most of the Asian equity indices were trading mixed; Shanghai Composite up by 0.93%, Hang Seng up by 0.62%, Nikkei up by 0.83%, while Straits Times down by 0.01, Taiwan Weighted down by 0.09% and Jakarta Stock Index down by 0.22% were the losers.

The European markets were trading in red; France’s CAC 40 lost 0.34%, Germany’s DAX dropped 0.48% while, UK’s FTSE 100 was down by 0.49%.