Markets continue to languish into negative territory; Nifty sulks sub 7,900 mark

Mood at Dalal Street, akin to globe, continued to remain downbeat on Tuesday on prevailing caution ahead of Russia, Ukraine Leaders meet later in the day amidst fears of escalation of ongoing geo-political tensions. The meeting in Minsk, Belarus, which also includes senior European Union officials, represents a fresh diplomatic push to end five months of fighting that has left over 2,000 people dead and comes a day after President Poroshenko dissolved parliament and called for early elections on October 26.

Back to home turf, though losses of local equity markets were capped despite cautious start of European markets, the trend continues to remain downbeat. Languishing near day’s low, both Sensex and Nifty were trading below the psychologically crucial 26,400 and 7,900 levels respectively, with losses of over quarter of a percent. Meanwhile, broader indices also staging reversal of sentiment were trading lower in the range of 0.25%-0.85%.

Sectorally, Power, Public Sector Undertaking (PSU) and Capital Goods counters were the pockets of weakness, which were endorsing the underlying weakness of markets, while those from FMCG, Information Technology and Metal counters were restricting further downside of the markets. Shares of leading metal companies, which went into a tailspin after the Supreme Court held that all coal blocks allocated by the government to various firms between 1993 and 2009 were done in an illegal manner, recovered in today’s trading session. Meanwhile, defensive buying activities had perked up FMCG shares. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1244:651; while 23 shares remained unchanged.

The BSE Sensex is currently trading at 26374.26, down by 62.76 points or 0.24% after trading in a range of 26331.83 and 26481.97. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.29%, while Small cap index down by 0.85%.

The gaining sectoral indices on the BSE were FMCG up by 1.00%, IT up by 0.49%, TECK up by 0.37%, Metal up by 0.27% while, Power down by 1.71%, PSU down by 1.58%, Capital Goods down by 1.53%, Oil & Gas down by 1.31%, INFRA down by 1.03% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 2.37%, Tata Steel up by 1.99%, Hindustan Unilever up by 1.54%, Cipla up by 1.46% and GAIL India up by 1.29%. On the flip side, Tata Power down by 3.38%, ONGC down by 3.08%, Larsen & Toubro down by 1.99%, BHEL down by 1.75% and SBI down by 1.27% were the top losers.

Meanwhile, In the wake of growing menace of un-authorized deposit raising schemes and scams such as Saradha and PACL, RBI Deputy Governor R Gandhi on Monday underscored the need for redefining the term called ‘deposit’. He noted that though the definition was clear in case of banks, but did not cover money collected by other entities, for which the exercise was being carried out by RBI in association with the government.

He also highlighted the need for defining the term ‘deposits’ in  way which would make it implicit as to who would be the regulator for different types of collection of money. He further noted that amendments would have to be made in the laws once the re-definitions would be completed. Additionally, he also pressed the need to strengthen state-level coordination committees so that un-authorized deposit taking could be dealt-with in a better way.

Notably, the comments from Gandhi come within days of capital markets regulator Securities and Exchange Board of India (SEBI) directing PACL, Delhi-based property developer, to return Rs 49,100 crore to depositors, and after the busting of earlier scams like the one caused by the Saradha Group in West Bengal and two Sahara Group companies.

Further, on the development of ‘newly revised norms on liquidity management’, the deputy governor asserted that this framework was aimed at reducing the volatility in the overnight rates and would have a positive impact in terms of predictability and timing.

The CNX Nifty is currently trading at 7886.55, down by 19.75 points or 0.25% after trading in a range of 7871.65 and 7915.45. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.34%, Tata Steel up by 2.05%, Tech Mahindra up by 1.74%, Hindustan Unilever up by 1.70% and GAIL India up by 1.31%. On the flip side, Jindal Steel & Power down by 4.36%, Tata Power down by 3.60%, ONGC down by 3.04%, IDFC down by 2.65% and ACC down by 2.27% were the top losers.

Asian markets were trading mostly lower; with Nikkei 225 lost 92.03 points or 0.59% to 15,521.22; Hang Seng shed 71.45 points or 0.28% to 25,095.46; Shanghai Composite plunged by 27.32 points or 1.23% to 2,201.96; Jakarta Composite trimmed 24.14 points or 0.47% to 5,160.81; Straits Times down by 2.52 points or 0.08% to 3,327.76 and FTSE Bursa Malaysia KLCI inched lower by 0.09 points to 1,862.22. On the flip side, Taiwan Weighted up by 3.34 points or 0.04% to 9,393.96 and KOSPI Index gained 7.16 points or 0.35% to 2,068.05.

European shares got off to somewhat cautious start; Germany’s DAX losing 28.42 points or 0.3% to 9,481.72; France’s CAC shedding 2.83 points or 0.07% to 4,339.28 and UK’s FTSE 100 gaining 28.43 points or 0.42% to 6,803.68