Markets sulk in red with losses of a percent on frenzied selling activities

Local equity markets after losing initial momentum continued trading into negative territory with massive losses of around a percent on sustained selling activities by funds and retail investors as the release of encouraging January IIP data and well within RBI’s comfort zone February CPI data failed to buttress the sentiment. On the macro-front, February consumer price index (CPI) rose to 5.37 percent versus 5.11 percent in the previous month, while industry output data (IIP) for January came in at 2.6 percent, higher than the 1.7% in December. However, positive global set-up also failed to have impact on Dalal Street. Sulking in red with massive losses, both Sensex and Nifty were trading below psychologically crucial 28,700 and 8,700 levels respectively. Meanwhile, broader indices also succumbing to selling pressure were down with cut of over 0.35-0.45%.

On the global front, Asian stock markets mostly rose Friday after weak U.S. retail sales alleviated jitters about the Federal Reserve's timetable for raising interest rates. U.S. retail sales fell 0.6 percent last month after a 0.8 percent decline in January, the Commerce Department said Thursday.

Closer home, most of the sectoral indices on BSE succumbed to selling pressure, nevertheless stocks from Auto, Capital Goods and Realty counters were the notable losers of the session. In stock-specific action, Shares in insurance companies surged on Friday after parliament passed a bill proposing to increase overseas investment limit in the sector. On the flip side, Four telecom stocks fell on aggressive bidding by telecom companies on eighth day of telecom spectrum auction on Thursday. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1642:850; while 100 shares remained unchanged.

The BSE Sensex is currently trading at 28655.93, down by 274.48 points or 0.95% after trading in a range of 28577.36 and 29183.76. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36%, while Small cap index down by 0.46%.

The losing sectoral indices on the BSE were Auto down by 1.30%, Capital Goods down by 1.28%, Realty down by 1.24%, FMCG down by 1.12% and Bankex down by 1.12%.

The top gainers on the Sensex were ONGC up by 0.67%, NTPC up by 0.56%, Coal India up by 0.52% and Bharti Airtel up by 0.43%. On the flip side, Bajaj Auto down by 2.55%, Axis Bank down by 2.19%, Sun Pharma Inds. down by 2.12%, BHEL down by 1.95% and Wipro down by 1.80% were the top losers.

Meanwhile, in a major boost to the government’s reform agenda, the Rajya Sabha on Thursday approved the insurance bill, thereby raising the ceiling for foreign investment in the sector from 26% to 49%. The Insurance Laws (Amendment) Bill, 2015 will replace the ordinance promulgated by the government last year.

The passage of the bill in the Rajya Sabha, with help from Congress, comes as a major relief to the Modi government which had been slamed for the high-handedness with which it had taken the ordinance route to carry out major policy decisions. Further, the passage of the bill, which provides power to Insurance Regulatory Development Authority (IRDA), also brings cheer for insurance agents. As per the Bill, the manner and amount of remuneration, or reward, to be paid or received by way of commission or otherwise, to an insurance agent or an intermediary, will be decided by the regulator.

Notably, Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) was able to get its thing done in the upper House, where it is in a minority, after the Congress decided to support the bill, signalling a rare consensus between the two national political parties on a key economic reform.

However, the passage of this bill in Rajya Sabha also raises hopes of legislative passage for some other crucial bills like the Coal Mines (Special Provisions) Bill and Mines and Minerals (Development and Regulation) Amendment Bill, 2015, which have been referred to a select committee by the house.

The CNX Nifty is currently trading at 8688.65, down by 87.35 points or 1.00% after trading in a range of 8671.00 and 8849.75. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were PNB up by 1.29%, ONGC up by 0.69%, Coal India up by 0.56%, Asian Paints up by 0.54% and NTPC up by 0.53%. On the flip side, Jindal Steel & Power down by 2.49%, Bajaj Auto down by 2.44%, BHEL down by 2.35%, Axis Bank down by 2.24% and Sun Pharma Inds. down by 2.21% were the top losers.

Asian markets were trading mostly higher; with Bursa Malaysia KLCI trading higher by 0.05 points or 0% to 1,786.92; KOSPI Index trading higher by 15.2 points or 0.77% to 1,985.79;  Shanghai Composite trading higher by 19.86 points or 0.59% to 3,369.18;  Hang Seng trading higher by 72.83 points or 0.31% to 23,870.79; Nikkei 225 trading higher by 263.14 points or 1.39% to 19,254.25. On the flip side, Taiwan Weighted was trading lower by 16.65 points or 0.17% to 9,579.35;  Jakarta Composite edged  lower by 13.19 points or 0.24% to 5,426.65 and Straits Times slid by 6.59 points or 0.2% to 3,367.01