Benchmarks extend losing streak to fifth straight session

Prolonging their southward journey for fifth straight session, Indian equity benchmarks ended the session with a cut of around three fourth of a percent. The barometer gauges traded near their neutral lines till noon deals but a sharp wave of selling, which emerged in last leg of trade, dragged the major indices below their crucial 8,400 (Nifty) and 27,700 (Sensex) levels. Selling was both brutal and wide-based as none of sectoral indices, barring consumer durables and metal, on BSE were spared. Counters, which featured in the list of worst performers, include healthcare, auto, fast moving consumer goods and oil and gas.

Sentiments remained dampened on account of disappointing set of earnings announcement by the IT bellwether HCL Tech. The company’s third quarter net profit fell by 12 percent sequentially, though was up 3.6 percent year-on-year to Rs 1,683 crore, impacted by adverse cross currency. Sentiments also weighed down on report that foreign portfolio investors sold shares worth a net Rs 1506.86 crore yesterday. Traders were also eyeing proceedings in parliament during the final part of the ongoing Budget session which began on Monday as the government hopes to pass the Goods and Services Tax (GST) and the Land Acquisition Bill.

On the global front, European markets were trading mostly in the green in early deals, with investors shrugging off broader market worries about Greece’s stalemate with international creditors. Asian markets ended mostly in the green led by Chinese and Japanese markets which surged as China’s step to prop up its faltering economy, on Sunday, by announcing a reduction in the amount of reserves commercial banks are required to hold by one percentage points lifted equities across Asia.

Back home, selling in healthcare space mainly dampened the sentiments, led by around 9% fall in Sun Pharmaceuticals after Japanese pharma major Daiichi Sankyo sold its 8.9% stake in Sun Pharma through multiple block deals on the stock exchanges. Stocks related to FMCG counter too edged lower on concerns that unseasonal rains that have damaged crops in parts of the country could reduce rural demand thereby hurting volumes also weighed on sentiment. Additionally, telecom stocks which were ringing loud in early trade on renewed buying activities, edged lower by close of trade. On the flip side, encouraging data from China, world’s largest metal consumer and producer lifted the entire Metal pack higher.

The NSE’s 50-share broadly followed index Nifty dipped by over seventy points to end below its psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over two hundred and ten points to finish below the psychological 27,700 mark. Broader markets too struggled to get any traction and ended the session with a cut of around half a percent. The market breadth remained in favour of decliners, as there were 1,277 shares on the gaining side against 1,415 shares on the losing side while 137 shares remain unchanged.

Finally, the BSE Sensex plunged by 210.17 points or 0.75% to 27676.04, while the CNX Nifty dropped by 70.35 points or 0.83% to 8,377.75.

The BSE Sensex touched a high and a low of 27976.93 and 27598.21, respectively. The BSE Mid cap index was down by 0.45%, while Small cap index was down by 0.32%.

The top gainers on the Sensex were Sesa Sterlite up by 1.59%, Tata Steel up by 1.06%, Axis Bank up by 1.00%, Wipro up by 0.67% and Hero MotoCorp up by 0.64%. On the flip side, Sun Pharma down by 8.86%, Hindustan Unilever down by 4.38%, Maruti Suzuki down by 3.00%, Dr. Reddys Lab down by 2.81% and Hindalco down by 2.78% were the top losers.

The gaining sectoral indices on the BSE were Metal up by 0.15% and Consumer Durables up by 0.13% while, Healthcare down by 3.24 %, Auto down by 1.31%, FMCG down by 1.17%, Oil & Gas down by 1.08% and Power down by 0.73% were the losing indices on BSE.

Meanwhile, suspecting a major Railway scam of over Rs 4,000 crore, CBI is likely to file a case soon into alleged manipulation in reporting the actual weight of loaded goods wagons. In FY 2012-13, railways transported 1,008 million metric tonnes of freight and earned Rs 85,262 crore through it, which constituted 67% of the total revenue for the period.

According to the procedure, the goods were required to be weighed at the originating station or en route or at the destination point with a view to plug the leakage of revenue and to avoid over-loading of the wagons.

However, CBI officials found this system to be manipulated at several places in such a way that over-loading was concealed and weight of the wagon appeared to be within the permissible limit. It also suspected the involvement of highly sophisticated methodology of crime for manipulating the software of system and believed involvement of railway officials, private vendors and freight operators for alleged manipulation. CBI officials pointed that even 5% under-reporting of actual weight of freight could lead to a difference of Rs 4,263 crore by 2012-13.

Railways had in consultation with Research Development and Standards Organization (RDSO) installed 200 'Electronic In-Motion Weigh Bridges' at various locations across the country to weigh the freight in transit. A total of six vendors were roped in by RDSO for setting up the bridges, which automatically measured the weight of goods train wagons passing through them at a speed of 15-km per hour.

However, during the surprise operation, CBI found 'systematic' under-weighing with the system programmed to give readings which were lower than the actual weight. It found that the quantum of under-weighing increased with an increase in speed of the rake at some of the locations. Notably, also the preliminary digital analysis of the forensic image taken at some of the locations revealed old weighing logs showing past manipulations in weighing.

The CNX Nifty touched a high and low of 8,469.35 and 8,352.70 respectively.

The top gainers on Nifty were Wipro up by 2.19%, Axis Bank up by 1.69%, Sesa Sterlite up by 1.49%, State Bank of India up by 1.30% and Tata Steel up by 1.12%. On the flip side, Sun Pharmaceuticals Industries down by 8.45%, Hindustan Unilever down by 3.99%, Hindalco Industries down by 3.22%, Ambuja Cements down by 3.20% and HCL Technologies down by 3.17% were the top losers.

Most of European Markets were trading in the green; Germany's DAX was up by 0.54% and France's CAC was up by 0.04% while, UK's FTSE 100 was down by 0.17%.

Most of the Asian equity indices ended the Tuesday’s trade in green terrain, drawing support from a rally in the U.S. and European markets overnight after China unveiled fresh stimulus to shore up the world’s second-largest economy. Chinese benchmarks edged higher by around two percent despite the growth slowdown and symptoms of overheating. Sentiment was bolstered after China's securities regulator moved to allay fears of a clampdown, saying the new short-selling measures weren't intended to encourage short-selling or depress the market, but aimed at maintaining the healthy development of the market. Meanwhile, Japanese Nikkei too edged higher by around one and a half percent as the yen weakened and investors bet on a stronger growth in company earnings. However, Seoul shares drifted lower on institutional selling amid concerns about a possible disappointing earnings season and lingering worries over Greece's future in the Eurozone.