Fears of disappointing quarterly earnings yank the bourses to fresh lows

Fears of disappointing quarterly earnings and a weakening trend on other Asian bourses have yanked the benchmark indices further lower in red. Asian stocks dropped for a second day in a row as higher borrowing costs in a French bond auction stoked concern about deepening Europe’s debt crisis. Meanwhile, the US future indices too were showcasing dismal trend in the screen trade. Back home, soon after the opening bell the key indices rose close to equator and registered intraday highs, however, a bout of selling pressure dragged them to fresh intraday lows during the first hour of opening bell. Meanwhile, the broader market, which was trading near intraday highs early today, gave up most of the early gains and were seen trading in red. The 30-share index, which had lost over 82 points in the past two sessions, fell further by 180.30 points, or 1.14%, to 15,676.78 points with Metal, Capital Goods and Power stocks leading the fall. However, stocks from Information Technology, Healthcare and Oil & Gas counters trading parallel were up with gains of over 0.15% each. The overall market breadth on BSE was in the favour of declines which thrashed advances in the ratio of 1221:869, while 79 shares remained unchanged.

The BSE Sensex is currently trading at 15676.78, down by 180.30 points or 1.14%. The index has touched a high and a low of 15,846.29 and 15,664.91 respectively.  There were 3 stocks advancing against 27 declines on the index.

The broader indices too losing substantial traction were trading in red; the BSE Mid cap index and small cap index declined by 0.83% and 0.36% respectively.

The only gaining sectoral indices on the BSE were Information Technology (IT) up by 0.19%, Healthcare up by 0.34% and Oil & Gas up by 0.36%, While, Metal down by 2.35%, CG down by 2.28%, Power down by 1.86%, Bankex down by 1.54% and Realty down by 1.45% were the top losers on the index.

The top gainers on the Sensex were RIL up by 0.41%, Infosys up by 0.25% and Maruti Suzuki down by 0.21%.

On the flip side, Jaiprakash Associates down by 4.13%, Bharti Airtel down by 3.92%, BHEL Down by 3.59%, Jindal Steel down by 3.26% and  Hero MotoCorp down by 3.10%  were the top losers on the Sensex.

Meanwhile, in its bid to help Indian corporates to access higher quantum of overseas funds, the country’s central bank - Reserve Bank of India reduced the minimum maturity period for external commercial borrowing (ECB) up to $20 million to three years as against the previous five years. The central bank also raised the annual limit of Foreign Currency Convertible Bonds (FCCBs) for companies to $750 million as against $500 million in a fiscal year under the automatic route that does not require prior regulator’s approval.

The RBI’s decision will not only help Indian corporate across all segments to access higher quantum of overseas funds but also encourage greater inflow of foreign exchange. It will encourage domestic firms to raise money through FCCBs up to $20-750 million without the RBI’s permission and can repay the debt in 3-5 years time.

In the specified service sectors like hotels, hospitals and software, corporate can raise FCCBs up to $200 million against the earlier limit of $100 million, subject to the condition that the proceeds would not be used for acquisition of land. For Non Government Organizations (NGOs) the ECB limit under automatic route has been doubled to $10 million from $5 million.

The S&P CNX Nifty is currently trading at 4,688.55, lower by 61.40 points or 1.29%. The index has touched a high and a low of 4,740.50 and 4686.85 respectively.  There were 5 stocks advancing against 44 declining one’s on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were BPCL up by 1.65%, Kotak Bank up by 0.46%, Reliance Industries (RIL) up by 0.38%, Infosys and Maruti Suzuki up by 0.17%.

On the flip side, Jaiprakash Associates down by 4.04%, Bharti Airtel down by 3.92%, BHEL down by 3.51%, Axis Bank down by 3.47% and Jindal Steel down by 3.44% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite down by 0.54%, Hang Seng plunged 1.40%, Jakarta Composite declined 0.94%, Nikkei 225 descended 1.63%, Straits Times lost 0.46%, Seoul Composite plummeted 1.94% and Taiwan Weighted slid 0.37%.