Markets extends early losses amid profit-taking, weak Asian cues

Indian equity benchmarks extended early losses and are trading near the intra-day low level in afternoon session of account of profit booking after an eight-day rally amid weak Asian cues. Market was in over-bought position and traders preferred to lock in gains at current levels, moreover, the World Economic Forum (WEF) report, which has ranked India among the worst-ranked countries on the basis of taxation and inflation also dampened the sentiments. Almost all sector indices were trading in red with realty as top the losing index trading down by around 4.56%. Apart from blue chip stocks, mid cap and small cap indices also witnessed profit booking and was trading down by over 0.60%. FMCG was the only index on the BSE trading in positive territory. Meanwhile, some support to domestic equity benchmarks came in from RBI which has permitted ECB lenders for extending loans in Indian Rupees to domestic businesses. In stock specific movement, shares of Idea Cellular were down over 3% at Rs 166 amid reports that US-based private equity investor Providence Equity Partners has planned to sell part of its stake in the mobile service provider at a discount to the current market price. 

On global front, most of the Asian markets were trading in red with Nikkei 225 down 0.39% and Taiwan Weighted down 0.23% as global investors turned cautious ahead of the European Central Bank's monetary policy announcement. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,100 and 27,100 levels respectively. The market breadth on BSE was negative, out of 2,675 stocks traded, 885 stocks advanced, while 1,715 stocks declined on the BSE.

The BSE Sensex is currently trading at 27012.51, down by 127.43 points or 0.47% after trading in a range of 26987.27 and 27169.12. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.66%, while Small cap index down by 1.03%.

The gaining sectoral index on the BSE was FMCG up by 0.31%. On the other hand while, Realty down by 4.56%, Consumer Durables down by 1.53%, Metal down by 1.51%, Capital Goods down by 1.40% and Power down by 0.97% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 0.97%, Hindustan Unilever up by 0.70%, ITC up by 0.59%, Sun Pharma Inds up by 0.56% and Hero MotoCorp up by 0.44%. On the flip side, Hindalco down by 4.03%, BHEL down by 4.00%, Tata Steel down by 1.94%, Tata Power down by 1.83% and Tata Motors down by 1.62% were the top losers.

Meanwhile, In a move which would add to the competition for local banks, which are already facing poor credit off-take by India Inc, the RBI has permitted ECB lenders for extending loans in Indian Rupees to domestic businesses. With this, foreign lenders can extend external commercial borrowings (ECBs) in Indian currency, however only if they mobilize Indian rupees through swaps undertaken with authorized dealers in India.

India’s central bank also mandated ECB contracts to comply with all other conditions applicable to the automatic and approval routes as the case may be. Besides, underlined that all costs of such ECBs should commensurate with prevailing market conditions.

Further, it also directed such banks to set up a representative office in India for executing swaps for ECBs denominated in rupees and underscored that the funds raised from overseas in domestic currency would help Indian companies to deal with risks associated with currency fluctuation.

The central bank has been easing the ECB procedures so that companies are not choked for funds. RBI has eased the refinancing procedure of ECBs where companies can repay any existing debt by raising fresh ECB at lower all-in-cost; however subject to the condition that the outstanding maturity of the original loans is maintained.

The CNX Nifty is currently trading at 8069.10, down by 45.50 points or 0.56% after trading in a range of 8062.65 and 8114.80. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Lupin up by 1.14%, Asian Paints up by 0.87%,  HDFC up by 0.79%, Hero MotoCorp up by 0.75% and Hindustan Unilever up by 0.66%. On the flip side, DLF down by 7.85%, Jindal Steel & Power down by 4.87%, BHEL down by 4.16%, Hindalco down by 4.03% and PNB down by 2.29% were the top losers.

Asian equity indices were trading mixed; KOSPI Index up by5.06 points or 0.25% to 2,056.26 and Shanghai Composite up by8.32 points or 0.36% to 2,296.95. On the other hand, Hang Seng down 84.62 points or 0.33% to 25,233.33, Nikkei 225 down 60.94 points or 0.39% to 15,667.41, Taiwan Weighted down 21.46 points or 0.23% to 9,428.89, Straits Times down 9.93 points or 0.3% to 3,338.84 and Jakarta Composite down 7.12 points or 0.14% to 5,217.02.