Markets languish at day’s low; European equities get off to a gap-down start

No respite seems to be coming into local equity markets, which languishing in negative terrain since early deals were currently sulking at day’s low point on Friday in absence of any positive triggers at home front and daunting global set-up. At day’s low points, while Sensex was trading below the crucial 25,300, Nifty was holding above 7,550 levels respectively, with colossal losses of over a percent. Meanwhile, broader indices nursing heavier losses were down and out with cut of around 2%. Prevailing risk-off mood after President Barack Obama authorized air strikes in Iraq adding to already simmering geopolitical tensions that fanned demand for safe haven assets, weighed on the sentiment. On the global front, after receiving negative hand-over from Asian pacific shares, European equities too got off to  a gap-down start, with the geopolitical landscape already looking explosive with tensions rising in Ukraine and Russia.

Closer home, in the broad-based and aggressive selling pressure, all the sectoral indices succumbed to negative territory, nevertheless brutal losses were borne by stocks from Realty, Power and Capital Goods counters. Meanwhile, public oil marketing companies (OMCs) declined as crude oil prices advanced amid escalating geopolitical tensions. Higher crude oil prices usually increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. Meanwhile, Auto sector too were witnessing selling pressure even after Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM) underscored that he expects car sales to grow between 5% and 10% this fiscal year. The overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1930:627; while 84 shares remained unchanged.

The BSE Sensex is currently trading at 25289.23, down by 299.78 points or 1.17% after trading in a range of 25276.34 and 25406.87. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.04%, while Small cap index down by 2.25%.

The losing sectoral indices on the BSE were Realty down by 3.19%, Power down by 2.74%, Metal down by 2.55%, Capital Goods down by 2.30%, PSU down by 2.23%.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.11%, Bharti Airtel up by 0.52%, TCS up by 0.52% and ITC up by 0.20%. On the flip side, Sesa Sterlite down by 3.23%, Mahindra & Mahindra down by 3.12%, BHEL down by 2.91%, Tata Power down by 2.84% and Hindalco down by 2.64% were the top losers.

Meanwhile, the controversial Insurance Bill is unlikely to come in the current session of Parliament, with the Union government’s efforts to break the deadlock being botched by Congress led opposition, who sticking to its decision wants the bill to be referred to select committee of the Rajya Sabha.

The first major economic reform initiative of the Narendra Modi government, which proposes to hike FDI in insurance to 49%, has been caught in a logjam over Congress-led opposition's insistence to refer the Bill to a Select Committee, in a move which is aimed at denying Prime Minister Narendra Modi the leverage to sell this financial sector reform when he visits the United States in September.

At a meeting with leaders of various parties, where Finance Minister Arun Jaitley offered to introduce the changes that the Congress and others wanted in the Bill without referring it to a select committee, Congress, along with eight parties, proposed to move a motion in the House for forming a select committee on the Bill. However, some reports suggest that government is mulling to send the bill to a select committee, but seek a report in a time-bound manner.

The CNX Nifty is currently trading at 7557.70, down by 91.55 points or 1.20% after trading in a range of 7552.80 and 7592.45. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 1.15%, HCL Tech. up by 0.81%, TCS up by 0.72%, Bharti Airtel up by 0.63% and ITC up by 0.16%. On the flip side, BPCL down by 3.74%, DLF down by 3.57%, Sesa Sterlite down by 3.35%, Mahindra & Mahindra down by 3.31% and BHEL down by 3.16% were the top losers.

Asian pacific markets were trading mostly lower; with Nikkei 225 trading lower by 454 points or 2.98% to 14,778.37; Taiwan Weighted sliding by 45.48 points or 0.5% to 9,085.96; FTSE Bursa Malaysia KLCI losing 29.69 points or 1.59% to 1,837.63; Straits Times shedding 25.51 points or 0.77% to 3,288.71; KOSPI Index plunging by 23.41 points or 1.14% to 2,031.10; Jakarta Composite dropping 9.65 points or 0.19% to 5,057.33; Hang Seng inching lower by 0.1 points or 0% to 24,387.46. On the flip side, Shanghai Composite up by 5.08 points or 0.23% to 2,192.75 was the lone gainer among Asian pack.

European markets were trading in red; Germany’s DAX lost 102.16 points or 1.13% to 8,936.81; UK’s FTSE 100 slid 42.16 points or 0.64% to 6,555.21 and France’s CAC inched lower by 29.72 points or 0.72% to 4,120.11