Benchmarks magnify losses; Nifty further retracts from 7,900 level

Benchmark equity indices after slipping into negative territory have magnified their losses on back of relentless selling activities by funds and retail investors in absence of any positive triggers and somber global cues. Trading at day’s low point, both Sensex and Nifty were trading below crucial 26,300 and 7,900 levels respectively, with losses of over half a percent. Meanwhile, broader indices incurring heavier losses, were down and out with losses of over 3/ 4 th of a percent.

On the global front, Asian stocks fell on Friday, led by the losses of Japan's Nikkei index, which pulled away from Thursday's seven-year closing high after data released before the market opened showed Japan's annual core consumer inflation eased in August, in another sign that the Bank of Japan could be forced into additional easing steps to meet its 2 percent inflation goal sometime next fiscal year.

Closer home, amidst the sea of red, only stocks from Healthcare counters were managing to showcase resilience, however stocks from Consumer Durables, Auto and Technology counters were the prominent losers. The gains of Healthcare counter was led by Sun Pharmaceutical Industries shares, which gained more than 6 pct, heading towards biggest single-day gain since April 9. The overall market breadth on BSE was in the favour of declines, which thumped advances in the ratio of 1607:990; while 96 shares remained unchanged.

The BSE Sensex is currently trading at 26298.05, down by 170.31 points or 0.64% after trading in a range of 26298.05 and 26578.55. 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 0.83%, while Small cap index down by 0.74%.

The losing sectoral indices on the BSE were Consumer Durables down by 1.64%, Auto down by 1.04%, INFRA down by 0.91%, Bankex down by 0.80%, TECK down by 0.80%.

The top gainers on the Sensex were Sun Pharma Inds. up by 3.97%, Hindalco up by 3.01%, ONGC up by 1.55%, Mahindra & Mahindra up by 1.41% and Tata Steel up by 1.12%. On the flip side, Hero MotoCorp down by 2.98%, HDFC down by 2.59%, Maruti Suzuki down by 2.41%, Cipla down by 2.36% and Sesa Sterlite down by 2.05% were the top losers.

Meanwhile, elements of the Indian business environment continue to deter foreign investors, according to Economic and Social Commission for Asia and the Pacific, UN-ESCAP, which also expects the macroeconomic uncertainties and structural constraints in India to continue to concern foreign investors.

According to the commission, the country currently is experiencing slower economic growth, high current account deficit, and enduring high inflation and pointed that despite this the foreign direct investment inflows into India have grown by 16.5% to $28 billion in 2013.

However, pressing upon the growing need for FDI, the commission in its Asia-Pacific Trade and Investment Report 2014, highlighted that with reforms of investments there would be a potential for attracting higher rates on investments in India and that higher FDI could help strengthen the economy and provide incremental level of productive employment, besides encouraging technological up-gradation.

Additionally, the commission also highlighted that many sectors continue to retain the equity limits on foreign ownership, which is quite usual and that finding suitable joint venture partner could risk hampering FDI inflows. It pointed that FDI cap of 51% in the multi-brand retail was a major obstacle in the FDI inflows to the sector and that foreign investors have been awaiting positive signals from the new government, which was elected in early 2014. The CNX Nifty is currently trading at 7872.45, down by 39.40 points or 0.50% after trading in a range of 7861.10 and 7952.95. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 4.02%, Hindalco up by 3.35%, NMDC up by 1.66%, Mahindra & Mahindra up by 1.33% and ONGC up by 1.30%. On the flip side, PNB down by 3.18%, Hero MotoCorp down by 2.65%, Maruti Suzuki down by 2.36%, HDFC down by 2.30% and Cipla down by 2.26% were the top losers.

Asian markets were reeling under pressure; with Nikkei 225 trading down by 144.28 points or 0.88% to 16,229.86; Hang Seng edging lower by 86.45 points or 0.36% to 23,681.68; Jakarta Composite declining by 84.47 points or 1.62% to 5,116.91; Taiwan Weighted shedding 21.77 points or 0.24% to 8,989.82; FTSE Bursa Malaysia KLCI losing 6.04 points or 0.33% to 1,837.07; KOSPI Index descending 2.47 points or 0.12% to 2,031.64 and Straits Times surrendering 1.92 points or 0.06% to 3,289.07. On the flip side, Shanghai Composite up by 1.57 points or 0.07% to 2,346.67 was the only gainer amongst Asian pack.