Benchmarks continue to trade in red in late morning session

Indian bourses continue to trade in red in the late morning session on sustained selling by funds and retail investors amid exit polls showing that the BJP may not be able to form government in Delhi. Though, the weakness seen today has nothing to do with the macro - economic fundamentals. Furthermore, discouraging third quarter earnings by some bluechip companies, weak trend in Asian stocks and depreciation in the rupee, was also dampening the trading sentiments. Some traders remained on the sidelines and refrained from any buying activity ahead of index of industrial production (IIP) data for December 2014 on February 12, 2015.

On global front, most Asian markets slipped after dismal Chinese trade data eclipsed a strong US jobs report, raising concerns about a deepening slowdown in the world's second-largest economy and sending the Australian dollar sliding. Furthermore, Oil prices advanced after last week enjoying their best weekly gains in four years, while traders are watching events in Europe as Greece's new anti-austerity government prepares to meet its creditors. Back home, Indian rupee plunged below 62-level by falling 36 paise at 62.05 against the US dollar in early trade due to fresh demand for the American currency from importers.

Back on street, all sectoral indices on BSE were witnessing heavy selling with Auto and Capital Goods remaining top losing indices, trading down by over 1.50%. Sell off also continued in broader indices with both mid cap and small cap indices trading down by over 0.75%. In scrip specific development, shares of Heidelberg Cement India have dipped after reporting net loss of Rs 9.89 crore in Q4 December 2014, higher than net loss of Rs 6.63 crore in Q4 December 2013. On the other hand, shares of Marico Kaya Enterprises have rallied after reporting an eight-fold jump in consolidated net profit at Rs 12.1 crore for the third quarter ended December 31, 2014.

The market breadth on BSE was negative, out of 2276 stocks traded, 772 stocks advanced, while 1427 stocks declined on the BSE.

The BSE Sensex is currently trading at 28392.38, down by 325.53 points or 1.13% after trading in a range of 28337.43 and 28566.50. There were 7 stocks advancing against 23 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 was lower by 0.78%.

The top losing sectoral indices on the BSE were Auto down by 1.56%, Capital Goods down by 1.52%, Realty down by 1.43%, Metal down by 1.22%, Infrastructure down by 1.17%, while there were no gainers.

The top gainers on the Sensex were Sun Pharma up by 1.41%, Bajaj Auto up by 0.62%, Hindalco up by 0.44%, ONGC up by 0.33% and Axis Bank up by 0.30%. On the flip side, GAIL India down by 4.13%, Tata Steel down by 3.37%, Tata Power down by 2.74%, Bharti Airtel down by 2.60% and Mahindra & Mahindra down by 2.50% were the top losers.

Meanwhile, the Reserve Bank of India (RBI), intervening in the money market has offered a two-day window to banks to tide over the liquidity mismatch situation in the banking system. As per the RBI release the central bank will offer funds to the banks for two days through Marginal Standing Facility (MSF) on February 7, 2015 (Saturday). The MSF remained open between 4.00 PM and 4.30 PM. The reversal will take place on February 9, 2015 (Monday).

Usually, the central bank does not offer such facilities on Saturdays, but on Friday, rates in the collateralized borrowing and lending obligation (CBLO), a facility through which banks can adjust their liquidity position jumped to a record 76%, prompting the RBI to open a half hour window.

Recently in its sixth bi-monthly credit policy review, the RBI while maintaining status quo for repo rate, announced reduction in the Statutory Liquidity Ratio (SLR) by 0.50 percentage point to 21.5 per cent. The move was for supporting liquidity to an extent of about Rs 45 000 crore. The RBI had initiated an easing monetary policy by reducing the repo rate from 8 to 7.75 per cent on January 15.

The CNX Nifty is currently trading at 8564.55, down by 96.50 points or 1.11% after trading in a range of 8547.30 and 8604.15. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.68%, Asian Paints up by 1.07%, Bajaj Auto up by 1.00%, Cairn India up by 0.91% and Jindal Steel & Power up by 0.74%. On the flip side, GAIL India down by 4.33%, DLF down by 3.64%, Tata Steel down by 3.36%, Zee Entertainment down by 2.99% and BPCL down by 2.88% were the top losers.

Most of the Asian equity indices were trading in red; Hang Seng dipped 0.48%, Taiwan Weighted decreased 0.31%, KOSPI Index shed 0.28%, Straits Times slipped 0.12% and FTSE Bursa Malaysia KLCI decreased 0.10%. On the flip side, Shanghai Composite rose 0.32%, Jakarta Composite increased 0.40% and Nikkei 225 was up by 0.24%.