Benchmarks witness bloodbath in early deals

Pressurised by feeble global cues, Indian equity benchmarks have made a gap-down start and are witnessing bloodbath in early deals on Friday. Frontline gauges tumbled below their crucial 26,400 (Sensex) and 7,900 (Nifty) levels as traders remained cautious with two Fed officials’ indicated that the Federal Reserve will probably start raising interest rates around the middle of next year. The US markets slumped again with major averages losing around two percent for the day and ending the session at their worst closing levels in about two months, offsetting the rally that was seen in the previous session. The Asian markets too were trading mostly in the red at this point of time amid concern Europe’s slowdown will hobble the world economy and as Hong Kong’s government scrapped talks with protesters.

Back home, sentiments remained down-beat on report from the HSBC Emerging Markets Index (EMI) has stated that manufacturing and services sectors in India expanded at a slower pace than China in September, even as emerging market output touched an 18 month high in the same month. Moreover, investors failed to draw any sense of relief from Department of Industrial Policy and Promotion’s (DIPP) statement that India will receive the highest-ever inflow of foreign direct investment (FDI) in the current financial year, attracted by the policy reforms announced by the new government.

On the sectoral front, software and technology witnessed the maximum gain in trade, while metal, fast moving consumer goods and power remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 551 shares on the gaining side against 1370 shares on the losing side while 56 shares remain unchanged.

The BSE Sensex opened at 26551.74; around 86 points lower as compared to its previous closing of 26637.28, and has touched a high and a low of 26555.92 and 26301.38 respectively. The BSE Sensex is currently trading at 26367.95, down by 269.33 points or 1.01%. There were 4 stocks advancing against 26 stocks declining on the index.

The overall market breadth remained in the favour of decliners with 27.87% stocks advancing against 69.30% declines. The broader indices were trading in red; the BSE Mid cap index was down by 1.16%, while Small cap index down by 1.10%.

The only gaining sectoral indices on the BSE were IT up by 2.62% and TECK up by 1.60% while, Metal down by 2.23%, FMCG down by 1.94%, Power down by 1.79%, Infrastructure down by 1.74% and Capital Goods down by 1.73% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 6.01%, Wipro up by 0.55%, TCS up by 0.28% and Dr. Reddys Lab up by 0.27%. On the flip side, Hindalco down by 3.07%, Tata Steel down by 3.03%, HDFC down by 2.81%, Tata Motors down by 2.69% and Bharti Airtel down by 2.42% were the top losers.

Meanwhile, in an attempt to downplay the threat of shut-down from sugar mills in Uttar Pradesh (UP), Food Minister, Ram Vilas Paswan, underscored that government though was ready for any eventualities, but was also prepared to extend export subsidy and give additional interest-free loans to clear cane arrears. He also asserted that sugar prices would not surge in absence of production from sugar mills in UP since the country had sufficient stock.

Burdened by payouts of around Rs 4,500 crore of cane arrears to farmers, private millers in UP, the second largest sugar producing state, threatened to shut operations this year, if cane prices were not linked to sugar rates. However, not budging from its stand, government has yet again sought mills’ guarantee to pay the cane arrears, before any relief package could be doled out.

Food Minister, Ram Vilas Paswan, expressed confidence that the standoff between the UP government and the mills over cane policy would be resolved, however he criticized the two different stands taken by the millers, with the first one being agreement to pay higher cane price fixed by state and later the denial by showing the inability to do so.

Further, the minister also pointed that while the farmers had many options to grow other crops like wheat, but sugar mills, which were set up with crores of rupees of investment, did not have an option other than producing sugar.

The CNX Nifty opened at 7,911.00; around 49 points lower as compared to its previous closing of 7,960.55, and has touched a high and a low of 7,912.65 and 7,854.50 respectively.

The CNX Nifty is currently trading at 7878.35, down by 82.20 points or 1.03%. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Infosys up by 5.84%, HCL Tech up by 1.66%, Tech Mahindra up by 1.39%, BPCL up by 1.04% and Wipro up by 0.62%. On the flip side, Tata Steel down by 3.23%, Cairn India down by 3.17%, Hindalco down by 3.07%, HDFC down by 2.97% and Tata Motors down by 2.95% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 tumbled by 208.21 points or 1.35% to 15,270.72, KOSPI Index slipped 26.27 points or 1.34% to 1,938.98, Straits Times dropped 29.99 points or 0.92% to 3,229.26, Jakarta Composite declined by 30.42 points or 0.61% to 4,963.46, Shanghai Composite dipped 14.09 points or 0.59% to 2,375.28 and FTSE Bursa Malaysia KLCI was down by 16.88 points or 0.92% to 1,812.85.

On the flip side, Hang Seng was up by 271.20 points or 1.17% to 23,534.53.

Taiwan market remained shut for the trade today for National Day.