Benchmarks extend losses after SC scraps illegal coal blocks

Indian equity extended losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters. Though the markets were in red from the early trades, a landmark decision of Supreme Court scrapping all but four of the coal blocks allocated between 1993 and 2010, further dampen the sentiments. Traders were seen piling positions in FMCG while selling was witnessed in Realty, Capital goods and Consumer Durables sector stocks. In scrip specific development, Sasken Communications was trading in red after CEO Anjan Lahiri resigned from the company. The markets may remain volatile in the near future as traders roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2014 series to next month i.e. October 2014 series. The near-month September 2014 F&O contracts will expire tomorrow i.e. September 25, 2014.

On the global front, the Asian markets were trading mostly in green while the European markets traded mostly on a subdued note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 26,700 levels respectively. The market breadth on BSE was negative in the ratio of 780:2063 while 77 scrips remained unchanged.

The BSE Sensex is currently trading at 26639.60, down by 136.09 points or 0.51% after trading in a range of 26560.00 and 26844.70. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.85%, while Small cap index down by 1.99%.

The only gaining sectoral indices on the BSE were FMCG up by 1.63% while, Realty down by 2.80%, Capital Goods down by 2.62%, Consumer Durables down by 1.57%, Infra down by 1.39% and Power down by 1.37% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.42%, Hindustan Unilever up by 2.42%, Wipro up by 1.85%, ITC up by 1.73% and Infosys up by 1.25%. On the flip side, Larsen & Toubro down by 3.11%, Hindalco down by 2.61%, BHEL down by 2.52%, Tata Power down by 2.35% and Tata Steel down by 2.28% were the top losers.

Meanwhile, global rating agency, Fitch outlined that hiking of interest rates by US Federal Reserve by the middle of 2015, would surely have some impact in the form of capital outflows on emerging markets, including India. However, it also underscored that India's credit profile was much stronger than other EM peers as the country was well prepared to deal with external shocks, including a rate hike by the Fed.

The rating agency which recently conducted a stress test to ascertain the impact of the US Fed rate hike on emerging markets, pointed that countries like Hungary, Mongolia and potentially Turkey were more vulnerable to the impact of rate hikes as compared to other countries that showed less vulnerability, which included names like India as well as Vietnam and Brazil.

It also emphasized that the decision of hike interest rates was bound to have affect emerging markets around the world, especially the BRICS (Brazil, Russia, India, China and South Africa). However, asserted that cycle was certainly in the favour of India, which saw strong 5.7% growth number in the second quarter, due to lower base effect. The agency also lauded RBI’s approach of taking preventive decision, i.e. by slashing has cut its current account deficit by more than half -- from $87.8 billion to $32.4 billion -- through curbs on gold imports and increases on other duties.

It was the reduction in the Current Account Deficits (CAD) since 2013 that has prevented any rating downgrade for the country from Fitch, which has consolidated India's rating at its current level of BBB minus with a stable outlook and unveiled a chance of future positive action if the country could further reduce its fiscal deficit and government debt levels.

The CNX Nifty is currently trading at 7975.00, down by 42.55 points or 0.53% after trading in a range of 7950.05 and 8042.05. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.81%, Coal India up by 2.34%, Wipro up by 1.96%, ITC up by 1.81% and Infosys up by 1.38%. On the flip side, Jindal Steel & Power down by 7.04%, PNB down by 4.06%, BPCL down by 3.14%, Bank of Baroda down by 2.99% and Larsen & Toubro down by 2.90% were the top losers.

The Asian markets were trading mostly in green; Jakarta Composite increased 2.71 points or 0.05% to 5,190.82, FTSE Bursa Malaysia KLCI increased 3.01 points or 0.16% to 1,843.20, KOSPI Index increased 6.73 points or 0.33% to 2,035.64, Taiwan Weighted increased 13.59 points or 0.15% to 9,098.49, Shanghai Composite increased 33.86 points or 1.47% to 2,343.58 and Hang Seng increased 84.54 points or 0.35% to 23,921.61.

On the other hand, Nikkei 225 decreased 38.45 points or 0.24% to 16,167.45 and Straits Times decreased 9.57 points or 0.29% to 3,288.52.

The European markets were trading mostly in red; Germany’s DAX decreased 14.83 points or 0.15% to 9,580.20, UK’s FTSE 100 decreased 10.39 points or 0.16% to 6,665.69 while, France’s CAC increased 1.29 points or 0.03% to 4,360.64.