Sell-off continues in domestic equities amid feeble global cues

Indian equity benchmarks continued to trade deeply in red in the afternoon session on account of selling witnessed in front line blue chip stocks amid weak global cues. Heavy selling by participants, following a weak trend at other Asian markets and an overnight slump in US shares on worries about the Eurozone and sinking oil prices dragged down the key indices. Further, the investors did not pay heed to some positive industry related announcement at domestic front such as Cabinet approved ordinance route for mines auction. Further, the government also removed arbitrary environmental clearance to boost infrastructure development. All sectoral indices on BSE were witnessing heavy selling with metal and oil and gas remaining top losing indices, trading down by over 2.30%. Sell off also continued in broader indices with both mid cap and small cap indices  trading down by over 1.60%. Among blue chip stocks, HUL was top gainer up by marginal 0.12%, while ONGC was top loser trading down by around 3.88%. 

In scrip specific development, Cairn India has dipped over 3% to Rs 236 as oil prices slumped to new 5-1/2-year lows yesterday on worries about a surplus of global supplies and lackluster demand.

On global front, Asian markets were trading in red with Straits Times down 1.52% and Jakarta Composite down 0.78%.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was negative, out of 2,471 stocks traded, 554 stocks advanced, while 1,852 stocks declined on the BSE.

The BSE Sensex is currently trading at 27272.57, down by 569.75 points or 2.05% after trading in a range of 27213.37 and 27698.93. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.63%, while Small cap index down by 1.73%.

The losing sectoral indices on the BSE were Oil & Gas down by 2.48%, Metal down by 2.38%, Realty down by 2.16%, Auto down by 1.94%, Bankex down by 1.91%. There was no gaining index on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 0.12% and Coal India up by 0.11%. On the flip side, ONGC down by 3.88%, Tata Motors down by 3.46%, Tata Steel down by 3.46%, HDFC down by 3.35% and Tata Power down by 2.89% were the top losers.

Meanwhile, in a major encouragement for new infrastructure projects development, the government removes arbitrary environmental clearance to facilitate infrastructure projects. In its recently released notification, the environment ministry has notified that building of large industrial sheds, schools, colleges and hostels of up to 150,000 square metres are now exempted from seeking a prior green nod for construction.

The government's decision will help to boost the infrastructure development in the country as  this green hurdle had made it difficult to build any plant over 5 acres of land and had forced some investors to explore alternate production hubs with lesser red tape. The new norms would also help businesses build larger factories that enjoy economies of scale much faster. However, the Ministry cleared that new buildings must ensure environment management by putting in place systems for rainwater harvesting, solid and liquid waste management. Further, as per the new norms, investors may use recycled materials such as fly ash bricks' for building new factories. 

Earlier, in 2013, the previous government had notified that building a factory was tantamount to undertaking a construction project and stipulated a prior environment clearance for any such industrial building with a built-up area of over 20,000 square metres. This regulation had jeopardized several greenfield and brownfield investment plans of large manufacturing players including MNC auto makers Maruti Suzuki as getting such a clearance takes two years in a best-case scenario.

The CNX Nifty is currently trading at 8213.25, down by 165.15 points or 1.97% after trading in a range of 8193.35 and 8327.85. There were 2 stocks advancing against 48 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 0.11% and Asian Paints up by 0.01%. On the flip side, Jindal Steel & Power down by 4.33%, ONGC down by 3.87%, Tata Steel down by 3.52%, NMDC down by 3.45% and Tata Motors down by 3.38% were the top losers.

Asian Markets were trading in red, Nikkei 225 down 475.35 points or 2.73% to 16,933.36, Hang Seng down 331 points or 1.4% to 23,390.32, Taiwan Weighted down 225.77 points or 2.43% to 9,048.34, Straits Times down 50.74 points or 1.52% to 3,277.54, Jakarta Composite down 40.94 points or 0.78% to 5,179.05, KOSPI Index down 33.3 points or 1.74% to 1,882.45, FTSE Bursa Malaysia KLCI down 26.32 points or 1.52% to 1,710.30, Shanghai Composite down 6.14 points or 0.18% to 3,344.38