Markets extend the disillusionment for the second day; Sensex slips below 26000

Indian markets extended their down side for the second straight session on Monday and the volatility of the derivative markets current month series expiry appeared ahead of the holiday. Benchmarks, which made a flat start could not resist long the selling pressure and gaveup in the very first hour of trade, entering finally into the red with deep gash. None of the corner showed any recovery signs and apart from the bluechips, medium and small cap stocks too lost their way. With the day’s losses Sensex slipped below the 26000 levels, while the Nifty too ended below 7750 mark

On the global front, while most of the Asian markets ended in green, the European markets too made a flat-to-positive start following the Chinese and Hong Kong market after Chinese industrial-company profits jumped the most last month since September; however the local traders remained indifferent and kept booking profits at every upmove.

Meanwhile, traders even ignored a positive statement from global ratings agency Moody's that recent decisions by the Reserve Bank of India (RBI) will be credit positive for India's sovereign rating. RBI recently raised the amount foreign institutional investors (FIIs) can buy in government debt to $25 billion from $20 billion. There was some spurt in the final hour of trade but that too could not pull the markets out of red, traders remained concerned ahead of US Federal Reserve’s policy makers two-day meeting starting tomorrow. On domestic front, investors were keeping an eye on the progress of monsoon, earnings and movement of rupee against the dollar. Rupee after a higher opening pared gains and was trading flat at the close of equity markets. Sectorally, major profit booking was witnessed in realty, metal and oil & gas sector, while modest support came from FMCG, IT and Tech counters. There were lots of result related scrip specific actions, while two power sector stocks JP Power Venture and Reliance Power remained buzzing throughout the day, ending higher by over three percent after latter entered into an MoU to acquire the entire hydro power portfolio of Jaiprakash Power Ventures for an estimated Rs 15,000 crore.

Finally, the BSE Sensex plunged by 135.52 points or 0.52%, to 25991.23, while the CNX Nifty declined by 41.75 points or 0.54%, to 7,748.70.

The BSE Sensex touched a high and a low of 26181.83 and 25900.25, respectively. The BSE Mid cap index was down by 0.42%, while Small cap index lost 0.70%.

The top gainers on the Sensex were Hindustan Unilever up by 3.69%, Sun Pharma up by 1.33%, BHEL up by 1.17%, Wipro up by 0.86% and Dr Reddys Lab up by 0.52%.

On the flip side, the key losers were Coal India down by 3.14%, Hindalco Inds down by 2.06%, Tata Motors down by 1.89%, Tata Steel down by 1.72% and ICICI Bank down by 1.65%.

On the BSE sectoral front, Consumer Durables up by 0.57%, FMCG up by 0.38%, IT up by 0.37%, Teck up by 0.18% and Healthcare up by 0.16% were the top gainers, while Realty down by 2.69%, Metal down by 1.51%, Oil & Gas down by 1.29%, PSU down by 1.07% and Auto down by 0.78% were the top losers in the space.

Meanwhile, Exports have remained a core feature of India’s textile industry. Textiles Ministry has set textile export target at $45 billion for the current financial year. In FY14 India exported textiles worth $40 billion. India’s textile industry exports account for around 10 percent of the country’s export earnings.

In order to support the industry’s exports, the government has taken various measures such as Focus Market Scheme, Market Linked, Focus Product Scheme and Duty Drawback Scheme. Domestic textile players are also exempted on import duty on the import of capital Goods under EPCG and raw material under Advance Authorisation Scheme. Further, interest subvention was enhanced to 3 percent from 2 percent under Interest Subvention Scheme. With the government various initiatives, India’s global market share in textile exports increased to 5.2 percent in 2013 from 3 percent in 2002.

Textile industry contributes around 4 percent to the gross domestic product (GDP) and nearly 14 percent to industrial production besides providing direct employment to over 45 million people. The present market size of the industry stands at around $90 billion, which is expected to touch $220 billion mark by 2020.

The CNX Nifty touched a high and low of 7,799.90 and 7,722.65 respectively.

The major gainers of the Nifty were Hindustan Unilever up 3.35%, HCL Technologies up by 1.84%, PNB up by 1.76%, Cairn India up by 1.72% and Sun Pharmaceuticals Industries up by 1.28%. On the flip side, the key losers were DLF down by 5.23%, Coal India down by 3.18%, UltraTech Cement down by 3.17%, BPCL down by 2.63% and Ambuja Cements down by 2.62%.

Most of European markets were trading in green; UK’s FTSE 100 was up by 0.13 % and France’s CAC 40 was up by 0.33%, while Germany’s DAX was down by 0.19%.

The Asian markets concluded Monday’s trade mostly in green, with China taking the lead after data showed a robust jump in profits earned by industrial firms in the world’s second-largest economy. Indonesia market was closed today on account of ‘Idul Fitri’ festival holiday while Malaysia and Singapore market were closed today on account of ‘Hari Raya Puasa’ holiday. The National Bureau of Statistics stated that profits earned by Chinese industrial firms rose 17.9% in June to 588.08 billion yuan ($94.98 billion) from a year earlier, up sharply from an 8.9% rise in May. The recent data have reinforced market expectations that the Chinese economy is powering through its recent soft patch as the government uses targeted stimulus measures to support growth. China has cut reserve requirements for some banks, accelerated infrastructure spending and loosened property curbs as Premier Li Keqiang seeks to keep growth from falling below his 7.5% target. Japan’s National Core CPI fell to a seasonally adjusted 3.3%, from 3.4% in the preceding month.