Markets continue to reel under pressure; Sensex stays off 27,000 crucial mark

Markets continuing to reel under pressure were trading with losses of around four tenths of a percent, which kept Sensex below psychologically crucial 27, 000 level and Nifty sub 8,100 mark. However, markets have bounced off day’s low point on account of bargain buying activities at day’s lowest point despite negative start of European markets. The losses at Dalal Street were mainly led by drubbing in blue chip stocks such a DLF, HDFC twins and Infosys. Meanwhile, broader indices continuing to outperform larger peers were trading with gains in the range of 0.10%-0.0.60%.

On the global front, in line with Asian counterparts, European counterparts too were reeling under pressure in the early trade after China’s finance minister quashed speculation that his government boosting economic stimulus. China’s Finance Minister Lou Jiwei reiterated that his government won’t make any major policy adjustments in response to changes in individual economic indicators, even as he said growth faces downward pressure.

Closer home, almost all the sectoral indices on BSE were trading in red, with exception being the stocks from Consumer Durable, FMCG, Auto and Oil & Gas counter. On the flip side, much of the drubbing was witnessed by stocks from Metal, Infrastructure and Information Technology counter. Pharma stocks tanked after the government capped the prices of 36 drugs, including major anti-infectives, gastro drugs and vaccines. These medicines add to the list of ‘348’ drugs that are deemed as ‘essential’ and therefore subject to price caps and cover up-to 30% of the total drugs sold in the country. Additionally, metal shares came under pressure after prices of industrial metals and iron ore declined in global market on Monday. On the flip side, jewellery stocks such PC jeweler, Titan Industries, Rajesh Exports and Gitanjali Gems were trading higher in heavy volumes. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1475:1292; while 89 shares remained unchanged.

The BSE Sensex is currently trading at 26991.22, down by 99.20 points or 0.37% after trading in a range of 26918.93 and 27012.99. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.08%, while Small cap index up by 0.57%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.38%, FMCG up by 0.62%, Auto up by 0.45% and Oil & Gas up by 0.10% while, Metal down by 1.60%, INFRA down by 0.97%, IT down by 0.82%, TECK down by 0.78% and Power down by 0.71% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.64%, ONGC up by 1.52%, ITC up by 1.49%, Hero MotoCorp up by 0.80% and ICICI Bank up by 0.48%. On the flip side, Cipla down by 2.41%, BHEL down by 2.25%, Tata Steel down by 1.97%, Dr. Reddys Lab down by 1.91% and Infosys down by 1.52% were the top losers.

Meanwhile, as a part of the overall strategy to strengthen the recovery mechanism, finance ministry has asked state-run banks to tighten the noose on their defaulting corporate borrowers to monetize their non-core assets for repaying loans. The moves comes on the heels of the ministry earlier urging these banks to constitute board-level committees to monitor recovery and put in place guidelines for an early warning system as part of their non-performing assets (NPA) management.

According to the ministry, the lenders, if needed, should pressurize defaulting borrowers to exit out of such ventures. Testifying theses views, it added that banks are already putting pressure on the debt-laden Bhushan Steel to sell its non-core assets, while Neeraj Singal, the company's vice-chairman and MD, was arrested by the Central Bureau of Investigation in an alleged cash-for-loan scam, in which Syndicate Bank chairman SK Jain is one of the accused.

Around 35 banks, including the country's biggest State Bank of India, have an exposure of around Rs 40,000 crore to Bhushan Steel. In yet another case, state-run lenders are already battling in courts to declare the now beleaguered Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulters.

Further, in a plan to reduce the pile up of bad loans at state-run banks, the government is also looking at speeding up the procedure to try loan default cases of over Rs 100 crore. Also, the ministry has constituted under VK Bhasin, former secretary in the law ministry's legal department, to suggest measures to deal with high-value wilful defaulters.

The CNX Nifty is currently trading at 8083.15, down by 38.30 points or 0.47% after trading in a range of 8064.80 and 8089.00. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.57%, ONGC up by 1.76%, ITC up by 1.54%, Jindal Steel & Power up by 1.09% and PNB up by 0.95%. On the flip side, Asian Paints down by 3.47%, Cipla down by 2.48%, IDFC down by 2.40%, DLF down by 2.38% and BHEL down by 2.36% were the top losers. 

Asian markets were reeling under pressure; with Hang Seng trading lower by 318.04 points or 1.31% to 23,988.12; Nikkei 225 down by 115.27 points or 0.71% to 16,205.90; Taiwan Weighted down by 105.8 points or 1.14% to 9,134.65; Shanghai Composite down by 39.76 points or 1.71% to 2,289.69; KOSPI Index down by 14.55 points or 0.71% to 2,039.27; Jakarta Composite down by 7.88 points or 0.15% to 5,219.71; Straits Times down by 4.41 points or 0.13% to 3,300.64 and FTSE Bursa Malaysia KLCI down by 3.05 points or 0.16% to 1,846.44

European markets started on a sluggish note; with UK’s FTSE 100 trading lower by 38.24 points or 0.56% to 6,799.68; Germany’s DAX edging lower by 33.96 points or 0.35% to 9,765.30 and France’s CAC shedding 17.75 points or 0.4% to 4,443.47.