Benchmarks trade lower in early deals; Nifty breaks down 8,600 mark

Extending their previous session southward journey, Indian equity benchmarks have made a negative start and are trading with a cut of over a percent in early deals on Monday on soft global cues. The US markets ended in red with traders ignoring the good jobs data. The jobs report altered market expectations for rate rises from the Fed with many now expecting the Fed to raise rates in the early summer. The Asian markets were trading mostly in the red at this point of time, as Chinese trade figures showed signs of weakness in the region’s biggest economy. Though, the Japanese market was trading marginally higher on a weaker yen.

Back home, sentiments remain dampened on reports that foreign portfolio investors sold shares worth a net Rs 96.45 crore on February 7, 2015, as per provisional data. Meanwhile, exit polls on Saturday said the Aam Aadmi Party (AAP) would form the government in Delhi. Investors remained on sidelines ahead of index of industrial production (IIP) data for December 2014 on February 12, 2015. On the same day, the government will release data for the annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India in January 2015.

Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include realty, auto, infrastructure and capital goods. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 602 shares on the gaining side against 1,344 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex is currently trading at 28401.89, down by 316.02 points or 1.10% after trading in a range of 28351.76 and 28566.50. There were 4 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.95%, while Small cap index down by 1.01%.

The losing sectoral indices on the BSE were Realty down by 2.29%, Auto down by 1.64%, INFRA down by 1.46%, Capital Goods down by 1.38% and Power down by 1.29% while there were no gainers on the index.

The top gainers on the Sensex were Sun Pharma up by 1.23%, Infosys up by 0.42%, ONGC up by 0.31%, Hindustan Unilever up by 0.05% and Wipro up by 0.00%. On the flip side, GAIL India down by 4.10%, Tata Power down by 3.29%, Tata Steel down by 2.82%, ICICI Bank down by 2.53% and Hero MotoCorp down by 2.46% were the top losers.

Meanwhile, in a move to throw a life-line to the struggling Goan iron ore sector, the Centre may soon come out with a special package for miners in the state by slashing duty on exports of the steel-making raw material, which presently stands at 30%

Mining plays a vital role both for Goa's economy and its people. However, mining activity in Goa has been shut for over two years now, although the Supreme Court lifted the ban in April last year. However, it is back on January 15, the Goa government revoked its order of September, 2012 regarding suspension of mining operations.

In a double whammy for the state, ban on mining coupled with an exorbitant 30% duty on iron ore exports made it difficult for miners in the state, which was once the largest exporting one. These problems got compounded with the slump of the iron ore price globally to its five-and-a-half year low last week.

In wake of all these problems faced by the state, Steel and Mines Minister Narendra Singh Tomar has also written to the Finance Ministry seeking an upward duty revision on steel imports that now ranges from 5-7.5%. It has sought introduction of a different duty structure for exports of low-grade iron ore from the state.

Notably, the government is contemplating on this move after steel imports into the country in the first nine months of the current fiscal zoomed around 60% forcing Indian domestic steel-makers to hold on prices even as their margins are getting further squeezed.

The CNX Nifty is currently trading at 8551.95, down by 109.10 points or 1.26% after trading in a range of 8551.80 and 8604.15. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.27%, Cairn India up by 0.51%, Infosys up by 0.34%, ONGC up by 0.10% and PNB up by 0.03%. On the flip side, DLF down by 5.08%, GAIL India down by 4.08%, Tata Power down by 3.53%, Zee Entertainment down by 3.18% and BPCL down by 2.84% were the top losers.

Most of the Asian equity indices were trading in red; Hang Seng dipped 113.47 points or 0.46% to 24,565.92, Taiwan Weighted decreased 36.06 points or 0.38% to 9,420.12, KOSPI Index shed 7.17 points or 0.37% to 1,948.35, Straits Times slipped 4.22 points or 0.12% to 3,427.14 and FTSE Bursa Malaysia KLCI decreased 1.53 points or 0.08% to 1,811.72. On the flip side, Shanghai Composite rose 9.19 points or 0.3% to 3,085.09, Jakarta Composite increased 25.63 points or 0.48% to 5,368.15 and Nikkei 225 was up by 39.3 points or 0.22% to 17,687.80.