Markets nurse heavy losses on accentuated selling pressure

Local equity markets, succumbing to selling pressure were now trading into negative territory with losses of over half a percent which dragged both Sensex and Nifty below psychologically crucial 27,500 and 8,300 levels respectively, i.e. at day’s low level. Barometer gauges erasing all the early gains, reversed trajectory on accentuated selling pressure which was witnessed in the early afternoon deals, well ahead of the start of European shares. Markets after witnessing sharp sell off on previous trading session staged a bounce-back in early deals on bargain buying activities. Sentiments were also buttressed after rating agency Moody's termed high bids received in spectrum auction as 'credit positive' for India, citing that the proceeds from the sale of airwaves will help the government meet its fiscal deficit target. However, selling pressure which crept in fizzled out all the early euphoria. Meanwhile, the session also turned out to be harrowing for broader indices, which were trading lower in the range of 0.90-1.25%.

On the global front, Asian markets experienced mixed fortunes after weak economic data from Japan underlined the struggle policymakers face in reviving the world's third-largest economy. Consumer inflation, excluding the impact of the April 2014 tax rise, returned to zero for the first time in nearly two years in February. Meanwhile, household consumption was 2.9% lower than a year ago, while retail sales were down 1.8%.

Closer home, with selling being broad- based in nature, most of the sectoral indices were reeling under pressure, nevertheless stocks from Realty, Oil & Gas and Fast Moving Consumer Goods counters were the worst performers of the session. On the flip side, stocks from Information Technology counter were the only gainer of the session. IT stocks rallied after global a global management consulting, technology services and outsourcing giant Accenture raised its full year revenue growth forecast for the second time in a year. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1550:477; while 21 shares remained unchanged.

The BSE Sensex is currently trading at 27338.04, down by 119.54 points or 0.44% after trading in a range of 27326.87 and 27694.41. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.04%, while Small cap index down by 0.81%.

The gaining sectoral indices on the BSE were IT up by 1.15%, TECK up by 0.23% and Capital Goods up by 0.06% while, Realty down by 2.38%, Oil & Gas down by 1.97%, INFRA down by 1.60%, FMCG down by 1.51% and PSU down by 0.97% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.20%, Hindalco up by 1.39%, NTPC up by 1.22%, TCS up by 1.02% and Larsen & Toubro up by 0.98%. On the flip side, Bharti Airtel down by 4.29%, Reliance Industries down by 3.07%, BHEL down by 2.64%, Axis Bank down by 2.45% and Tata Power down by 2.16% were the top losers.

Meanwhile, in an encouraging development for the economy, rating agency Moody's termed high bids received in spectrum auction as 'credit positive' for India, citing that the proceeds from the sale of airwaves will help the government meet its fiscal deficit target. The rating agency highlighted that this development will be credit positive for the sovereign in the near term, particularly since tax revenue receipts have been lacklustre this fiscal year.

Moody’s however expects government to implement a variety of measures to meet its fiscal deficit targets this year and next. In the Union Budget 2015, which was Modi’s government first fully fledged budget, fiscal deficit target for 2014-2015 was pegged at 4.1% of GDP and 3.9% for the next fiscal.

In its report, Moody’s pointed that this development would have indirect sovereign impact, through the banking system from the increase in firms' leverage related to the bids. It cautioned that several other factors will play a role in determining the impact of such leverage on the system, including the sector's growth and profitability and hence, termed this as an indirect issue from the sovereign perspective.

After 19 days of fierce bidding, the government raked in a record bounty of nearly Rs 1.10 lakh crore in the country's biggest auction of telecom spectrum that ended on Wednesday. This is highest ever in history of India. The spectrum auction conducted in 2010 brought about Rs 106,000 crore which included Rs 30,000 crore payments. Lastly, depending on the band, carriers will have to pay as much as 33 percent of their final bid within 10 days of the auction's conclusion and the rest in 10 annual installments starting in 2017.

 The CNX Nifty is currently trading at 8297.60, down by 44.55 points or 0.53% after trading in a range of 8293.75 and 8413.20. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.94%, Hindalco up by 1.62%, TCS up by 1.14%, NTPC up by 1.08% and Larsen & Toubro up by 1.00%. On the flip side, Idea Cellular down by 6.01%, Bharti Airtel down by 4.50%, PNB down by 3.27%, Reliance Industries down by 2.93% and Asian Paints down by 2.91% were the top losers.

Asian markets were trading mostly lower; with Shanghai Composite edged up by 7.48 points or 0.2% to 3,689.57; Straits Times edged up by 16.57 points or 0.48% to 3,448.16 and Jakarta Composite edged up by 18.4 points or 0.34% to 5,387.20. On the flip side, Nikkei 225 edged lower by 185.49 points or 0.95% to 19,285.63; Taiwan Weighted edged lower by 115.4 points or 1.2% to 9,503.72; Hang Seng edged lower by 37.75 points or 0.15% to 24,459.33; KOSPI Index edged lower by 2.76 points or 0.14% to 2,019.80 and FTSE Bursa Malaysia KLCI edged lower by 2.06 points or 0.11% to 1,816.