Markets languish at day’s low point; Nifty sulks below 8500 mark

Local equity markets were languishing at day’s low in absence of any positive trigger which could lift the bourses from doldrums. Both, Sensex and Nifty nursing heavy loss of around half a percent were trading below psychologically crucial 28,300 and 8, 500 levels respectively. Meanwhile, broader indices also succumbing to selling pressure, were down and out by losses in the range of 0.30%-0.40%.

On the global front, Asian equities kicked off the week on somber note despite news of a deeper-than-expected recession in Japan and China's trade data coming in below expectations. Revised economic data on Monday showed that Japan's recession was deeper than originally estimated. Meanwhile, China's exports and imports in November both failed to meet market forecasts, highlighting a slowing economy.

Closer home, most of the sectoral indices on BSE had already surrendered to selling pressure, except stocks from Fast Moving Consumer Goods, Public Sector Undertaking counters which were the top gainers of the session. On the flip side, stocks from IT, TECK and Capital Goods counters were the prominent losers of the session.  The plunge of IT counter was led by Infosys shares which slumped after its four promoters sell off 32.6 million shares for $1.1 billion. Meanwhile, stocks of insurance companies hogged limelight after reports suggested of replace foreign investment by FDI in Insurance sector. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1636:1040 shares remained unchanged; while 96 shares remained unchanged.

The BSE Sensex is currently trading at 28277.00, down by 181.10 points or 0.64% after trading in a range of 28259.80 and 28494.85. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index down by 0.25%.

The gaining sectoral indices on the BSE were FMCG up by 0.41% and PSU up by 0.01% while, IT down by 2.77%, TECK down by 2.14%, Capital Goods down by 0.98%, Consumer Durables down by 0.72% and Power down by 0.58% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.27%, Bharti Airtel up by 1.09%, ITC up by 0.92%, Sun Pharma Inds. up by 0.85% and Tata Motors up by 0.67%. On the flip side, Infosys down by 4.48%, Sesa Sterlite down by 2.34%, Dr. Reddys Lab down by 2.26%, TCS down by 2.10% and Hindalco down by 2.02% were the top losers.

Meanwhile, the government would be evaluating 31 foreign investment proposals, including those of Ratnakar Bank, Novartis Healthcare and HDFC Bank among others in the coming week. Other investment proposals include that of Lausanne Hospitality Consulting Sa, Switzerland; Sprint Telecom India; Maham Nayyar and Miss Sahar Nayyer, Pakistan; and Symbiotec Pharmalab.

However, out of the total, nine proposals were the ones on which the foreign investment promotion board (FIPB) had deferred a decision in its earlier meetings. The nine proposals include that of Pureplay Investment Partners (Mauritius), INX Music, ASV Europa Security Private Limited, Halyard Health Inc (US) and Beloor Bayir Biotech, Tevapharm India Pvt, GMU Infosoft Pvt, U Infosoft Pvt Ltd, and Monsoon Capital LLC, US.

While India permits FDI in most of the sectors through automatic route, approval of the Foreign Investment Promotion Board (FIPB) in the Finance Ministry is required in certain sectors like pharmaceutical and defence, considered sensitive for the economy.    Meanwhile, assuring that there is light at the end of the tunnel, Union Minister Nirmala Sitharaman stated that the government would consult all stakeholders to make the land acquisition law an “enabler” rather than a “stifler”. The commerce and union minister’s comments came amidst industry’s rising concern over existing land and acquisition Act, which made acquisition of land next to impossible.

The Land Acquisition Bill, which was passed during the previous UPA regime with then opposition BJP supporting it, provides for “fair compensation” for acquiring farm land for industrial projects. However, this without any surprises made land acquisition harder, with states coming out openly against the law, citing it had adversely impacted the process of acquiring land for infrastructure projects.

With this, Rural Development Ministry has already suggested a number of amendments to the Land Acquisition Act that will dilute provisions such as mandatory consent of at least 70% locals for acquiring land for PPP projects, and 80% for private projects. However, it is unlikely that the government would be able to table amendments to the Land Act during the winter session since it would require more time to get the Opposition on board, on its proposal to simplify land acquisition rules for PPP projects.

The CNX Nifty is currently trading at 8481.65, down by 56.65 points or 0.66% after trading in a range of 8478.15 and 8546.35. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.23%, Bharti Airtel up by 1.21%, ITC up by 1.02%, DLF up by 0.90% and Sun Pharma Inds. up by 0.75%. On the flip side, Infosys down by 4.51%, Sesa Sterlite down by 2.63%, Dr. Reddys Lab down by 2.29%, TCS down by 2.25% and Hindalco down by 2.21% were the top losers.

Asian markets were trading mostly lower; Nikkei 225 trading higher by 15.19 points or 0.08% to 17,935.64; Hang Seng advancing by 81.33 points or 0.34% to 24,083.97 and Shanghai Composite gaining by 82.53 points or 2.81% to 3,020.17.

On the flip side, Jakarta Composite declined by 45.38 points or 0.87% to 5,142.61; Taiwan Weighted was trading lower by 19.28 points or 0.21% to 9,187.29; FTSE Bursa Malaysia KLCI edged lower by 11.98 points or 0.68% to 1,737.39; KOSPI Index shed 7.67 points or 0.39% to 1,978.95 and Straits Times slid 4.87 points or 0.15% to 3,319.52