Markets slump in early deals after a resilient start

Indian markets after making quiet a resilient start have lost their way and were trading lower on sudden profit booking in the very first hour of trade. The feeble global cues have indicated weakness to be followed by the domestic markets, as the US markets slumped overnight while the Asian markets made mostly a lower start. Indian markets after showing consolidation in last session are once again back on their southbound journey and both the major indices were suffering cuts of around a percent each. While Sensex lost its crucial psychological level of 27600, Nifty has slipped below 8300 mark. All the sectoral indices on the BSE were trading in red with some of them suffering cut of over one and half a percent. The broader markets too were trading lower in tandem with the benchmarks. There was some buzz in the non sectoral gauges of sugar, after the government increased the procurement prices of ethanol by Rs 1 per litre and sugar industries are expected to see better realization with the decision. The government has fixed a price of Rs 48.50-49.50 per litre for procurement of ethanol for blending with petrol, a rate much higher than the price oil companies presently pay to buy the sugarcane extract. Bajaj Hindusthan and Balrampur Chini were up by over 6%, Shree Renuka sugars was up by over 5%.

The BSE Sensex is currently trading at 27626.06, down by 205.04 points or 0.74% after trading in a range of 27572.70 and 27796.34. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.76%, while Small cap index lost 0.73%.

The losing sectoral indices on the BSE were Capital Goods down by 1.57%, PSU down by 1.17%, Realty down by 1.16%, Auto down by 1.08%, Metal down by 1.04%.

The top gainers on the Sensex were Sun Pharma Inds. up by 0.70%, Bharti Airtel up by 0.48%, HDFC up by 0.36%, Hindustan Unilever up by 0.34% and Mahindra & Mahindra up by 0.28%. On the flip side, GAIL India down by 2.39%, Tata Motors down by 2.11%, Infosys down by 1.85%, Larsen & Toubro down by 1.82% and ONGC down by 1.62% were the top losers.

Meanwhile, the State Bank of India's newly launched SBI Composite Index has jumped 16% in December to 55.4, suggesting a strong revival in manufacturing activity in the country. The index value for the month of December is the highest in the past 20 months amid a turnaround in sentiment after Prime Minister Narendra Modi was elected to power. The SBI Composite Index tracks primarily manufacturing activity in the country and rivals the existing British lender HSBC's Purchasing Manager Index. The SBI planned to publish the indicator on monthly basis, which will track two months in advance the possible trends in official estimates.

The SBI Composite index has been developed on the basis of the bank’s internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain. With an aim to predict the phase of business cycles for the economy,  this forward looking indicator takes into account detailed activity/traction in consumer spending, mining activity, interest rates, inflation, exchange rates, SBI lending and performance of various thematic indices. The index will help regulators, policy makers and market participants to identify the turning points in the manufacturing cycles in advance and adjust their investment or marketing strategy.

SBI Composite index captures two components of the manufacturing cycle, namely month-on-month and year-on-year growth. The two separate indices have been constructed on a scale of 0-100 and like HSBC Purchasing Manager Index, an index reading above 50 implies growth over the previous respective period and less than 50 would suggest a contraction over respective period. The SBI has notified that during the period 2007-2014, the SBI Composite Index predicts the direction correctly for 72% of times, while the directional predictability for PMI is stood around 50% for the same period. 

The CNX Nifty is currently trading at 8295.65, down by 60.00 points or 0.72% after trading in a range of 8281.50 and 8348.30. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 0.63% and HDFC up by 0.57% and Bharti Airtel up by 0.55% and Kotak Mahindra Bank up by 0.41% and Hindustan Unilever up by 0.40%. On the flip side, GAIL India down by 2.36%, Tata Motors down by 2.17%, Cairn India down by 2.06%, Infosys down by 1.96% and Larsen & Toubro down by 1.90% were the top losers.

The Asian markets were mostly in red barring the Taiwan Weighted, which was up by 4.92 points or 0.05% to 9,037.08.On the other hand, Hang Seng lost 284.68 points or 1.21% to 23,239.84, Nikkei 225 declined by 153.93 points or 0.88% to 17,258.65, KOSPI Index was lower by 21.02 points or 1.08% to 1,924.54, Shanghai Composite was down by 18.31 points or 0.62% to 2,921.70, FTSE Bursa Malaysia KLCI lost 11.02 points or 0.62% to 1,754.50, Jakarta Composite declined by 10.83 points or 0.21% to 5,154.57 and Straits Times traded lower by 5.33 points or 0.16% to 3,320.48.