Markets continue to sulk in red; with colossal losses of over 1.25%

Local equity markets continued to trade in doldrums, with colossal losses of over 1.25% that has dragged both Sensex and Nifty below psychologically crucial 29,100 and 8,850 levels respectively. However, losses were less brutal for broader indices, which were trading lower in the range of 0.20-0.50%. Sentiment took a hit after regional shares collapsed post strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought, which threw rupee in a tailspin, taking its below 62.50/$ level.

On the global front, U.S. non-farm payrolls (NFP) data on Friday showed the unemployment rate hit a 6-1/2-year low of 5.5 percent in February. Wage gains though were only slight, yet the data stoked expectations that the Fed was now likely to drop a reference to 'patience' on the timing of a rate hike at its next policy meeting on March 18, thus opening the door for a June rate rise.

Closer home, with losses being broad- based in nature, none of the sectoral indices on BSE were trading lower, nevertheless stocks from Banking, Power and Information Technology counters were the ones that were the worst performers of the session. The banking stocks were the worst hit in trade, with all Axis Bank, ICICI Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Bank of India and Bank of Baroda falling between 1-3%. Surprisingly, IT stocks came under pressure despite weak rupee after TCS management sounded caution about March Quarter earning. TCS said it continues to see weakness in insurance vertical, while identifying energy and telecom verticals as “problem areas”. The overall market breadth on BSE was in the favour of declines which outnumbered advances in the ratio of 1556:992; while 105 shares remained unchanged.

The BSE Sensex is currently trading at 29079.92, down by 369.03 points or 1.25% after trading in a range of 29017.01 and 29321.06. 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 0.51%, while Small cap index down by 0.23%.

The losing sectoral indices on the BSE were Bankex down by 1.96%, Power down by 1.82%, IT down by 1.67%, TECK down by 1.48% and INFRA down by 1.29%.

The top gainers on the Sensex were Hindustan Unilever up by 2.35%, Dr. Reddys Lab up by 1.22%, Coal India up by 0.82%, Bajaj Auto up by 0.60% and Sun Pharma Inds. up by 0.17%. On the flip side, Sesa Sterlite down by 3.74%, GAIL India down by 3.65%, Axis Bank down by 2.92%, ICICI Bank down by 2.89% and Hindalco down by 2.64% were the top losers.

Meanwhile, strengthening the national auditor’s claims that allocation of mines over the years had caused considerable losses to the exchequer, the government has garnered Rs 5164 crore from the sale of two mines to Jaypee Cement and Ambuja Cement, with the cumulative proceeds from the auction swelling to Rs 1.57 lakh crore.In a fierce biddings on the fourth day of second tranche of ongoing auctions, which lasted for hours, while Ambuja Cement managed to clinch Gare-Palma Sector-IV/8 block in Chhattisgarh by biddng Rs 2291 per tonne, Jaypee Cement Corporation grabbed Mandla-South block in Madhya Pradesh, by bidding at Rs 1852 per tonne. Auction for Mandla South, began at Rs 1,850 per tonne, while for Gare Palma IV/8 started at Rs. 1,675 per tonne.

Put together in these four days of auction, the government has raised Rs 1.57 lakh crore, which includes Rs 1 lakh crore from auction of 19 mines in the first round. Additionally, two more coal blocks - Utkal C and Lohari - have been put up for auction on Monday. The amount of proceeds has been calculated based on extractable reserves and highest bid price.

The auctions follow the Supreme Court's decision last year to cancel the allocation of 204 coal mines. Prime Minister Narendra Modi had earlier this month  raised some doubts after he underscored CAG's astronomical Rs 1.86 lakh crore loss figure in coal block allocation, but with auction of less than 10% of those mines (19 mines in first tranche) alone  that has garnered Rs 1.10 lakh crore has proved these claims to be right.

The CNX Nifty is currently trading at 8818.20, down by 119.55 points or 1.34% after trading in a range of 8800.90 and 8891.30. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 6.77%, Hindustan Unilever up by 2.45%, Lupin up by 1.46%, Dr. Reddys Lab up by 1.12% and Coal India up by 0.81%. On the flip side, Sesa Sterlite down by 3.78%, Ultratech Cement down by 3.62%, GAIL India down by 3.49%, NTPC down by 3.04% and ICICI Bank down by 3.01% were the top losers.

Asian markets were trading mostly lower; with Hang Seng trading higher by 4.67 points or 0.02% to 24,168.67; KOSPI Index trading higher by 6.94 points or 0.35% to 1,968.39 and Shanghai Composite trading higher by 59.74 points or 1.84% to 3,300.93. On the flip side, Nikkei 225 trading lower by 180.45 points or 0.95% to 18,790.55; Taiwan Weighted trading lower by 82.79 points or 0.86% to 9,562.98; Jakarta Composite trading lower by 71.31 points or 1.29% to 5,443.47; FTSE Bursa Malaysia KLCI trading lower by 17.44 points or 0.97% to 1,789.52 and Straits Times trading lower by 10.91 points or 0.32% to 3,406.60.