Markets languishes at day’s low on accentuated selling pressure

Local equity markets extending their losing spree, were currently languishing at day’s low on relentless selling activities by funds and retail investors on the back of pessimistic global set-up. Meanwhile, macro-economic data which released after market closing hours on Monday, also weighed on the sentiment. On the macro-front, India's Current Account Deficit (CAD) for the second quarter of the current financial year widened to $10.1 billion against $5.2 billion on Y-o-Y basis, which translated into 2.1% of GDP against 1.2% in the same quarter the previous year. The deficit is not only higher on Y-o-Y basis, but also higher on sequential basis. Both, Sensex and Nifty were trading below crucial 28,000 and 8,400 levels respectively, with losses of over half a percent. Meanwhile, broader indices also succumbing to selling pressure were trading with losses of around 0.60%-0.70%.

On the global front, Asian shares traded lower on Tuesday, following losses on Wall Street prompted by slumping oil prices and worries about global growth. Investors’ sentiment was also weighed on by a private survey that showed that business confidence continued to decline in November.

Closer home, all the sectoral indices on BSE has capitulated to selling pressure, stocks from metal, power and capital goods counters were the prominent losers.  However, in stock specific activity, insurance stocks rallied after Finance Minister Arun Jaitley expressed satisfaction over recommendations on insurance bill made by a parliamentary panel, the government said in a statement on Monday. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1527:458; while 19 shares remained unchanged.

The BSE Sensex is currently trading at 27942.71, down by 176.69 points or 0.63% after trading in a range of 27929.61 and 28157.53. 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 0.72%, while Small cap index down by 0.60%.

The losing sectoral indices on the BSE were Metal down by 2.06%, Power down by 2.05%, Capital Goods down by 1.56%, INFRA down by 1.46% and Consumer Durables down by 1.37%.

The top gainers on the Sensex were Sun Pharma Inds. up by 1.41%, Dr. Reddys Lab up by 0.88%, Hero MotoCorp up by 0.72%, TCS up by 0.63% and Bajaj Auto up by 0.60%. On the flip side, Sesa Sterlite down by 4.08%, NTPC down by 3.75%, Bharti Airtel down by 3.30%, Hindalco down by 2.42% and Tata Power down by 2.41% were the top losers.

Meanwhile, Global credit rating agency Fitch, in its latest Global Economic Outlook, has highlighted that India will be the only BRIC country where growth picks up in 2014 to 5.6% and further accelerates to 6.5 % in 2015 and 6.8 % in 2016, owing to the government's reforms to improve the business environment.

After registering an average growth rate of 8% during FY08-FY12, Indian economic growth had slowed down to below 5% over the last two financial years. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, the economy has shown signs of nascent recovery and expanded at 5.5% during first half of this fiscal as compared to 4.9% in the same period of previous fiscal. 

On RBI's monetary policy, Fitch stated that policy might become more accommodate in 2015 due to lower inflation, which would support GDP growth. A new monetary policy framework resulting from discussions between government and RBI could contribute to a credible low inflation environment in the future.

On global front, the rating agency noted that global growth is uneven, but it will strengthen in 2015 and 2016. As world recovery is increasingly dependent on the US growth engine, a buoyant US economy is the main engine of global growth. Fitch expects that China's slowdown is structural and GDP growth is likely to moderate to 7.3% in 2014, 6.8% in 2015 and 6.5% in 2016.

The CNX Nifty is currently trading at 8380.80, down by 57.45 points or 0.68% after trading in a range of 8379.75 and 8444.50. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.53%, Hero MotoCorp up by 0.76%, Dr. Reddys Lab up by 0.72%, Mahindra & Mahindra up by 0.72% and TCS up by 0.69%. On the flip side, Sesa Sterlite down by 3.95%, NTPC down by 3.43%, Bharti Airtel down by 3.37%, ACC down by 3.15% and Jindal Steel & Power down by 2.66% were the top losers.

Asian markets were reeling under pressure; with an exception of Straits Times index which rose by 21.02 points or 0.64% to 3,318.86. While, Hang Seng declined by 558.92 points or 2.32% to 23,488.75; Shanghai Composite shed 169.32 points or 5.61% to 2,850.94; Nikkei 225 lost 122.26 points or 0.68% to 17,813.38; Taiwan Weighted slid 58.39 points or 0.64% to 9,128.90; Jakarta Composite descended by 13.4 points or 0.26% to 5,130.61; KOSPI Index surrendered 8 points or 0.4% to 1,970.95 and  FTSE Bursa Malaysia KLCI decreased 3.08 points or 0.18% to 1,737.76.