Markets extends free-fall on strong selling

Local equity markets continuing with their freefall were trading at day’s low point with loss of over 2% which dragged Sensex and Nifty below psychologically crucial 26,800 and 8,150 levels respectively. Continued offloading by foreign investors amid retrospective tax worries also weighed on the sentiment. The sell-off was initially sparked by a slump in Nifty futures listed on the Singapore exchange, which are now trading at a discount to domestic Nifty futures. Meanwhile, the session was also harrowing for broader indices, which were trading with losses of over 2.50%.

On the global front, a selloff in global sovereign bonds pushed Asian stocks to two-week lows on Wednesday as investors worried it might trigger profit-taking in other asset classes.  Bonds have been among the best performing asset classes in recent years thanks to the unconventional policy easing steps taken by global central banks, but signs are emerging that investors are tired of chasing ever-shrinking yields.

Closer home, all the sectoral indices on BSE succumbed to selling pressure, stocks from Capital Goods, Power and Realty counters were the prominent losers of the session.  Sentiments also took a knock after somber macro-economic data. HSBC Services Purchasing Managers' Index, compiled by Markit, fell to a three-month low of 52.4 in April from March's 53.0. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 2015:436; while 92 shares remained unchanged.

The BSE Sensex is currently trading at 26784.77, down by 655.37 points or 2.39% after trading in a range of 26738.55 and 27501.15. There was just 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.86%, while Small cap index down by 2.88%.

The top losing sectoral indices on the BSE were Capital Goods down by 3.87%, Power down by 3.49%, Realty down by 3.14%, PSU down by 3.12%, Metal down by 3.11%.

The lone gainer on the Sensex was Bharti Airtel up by 1.54%. On the flip side, BHEL down by 5.01%, NTPC down by 4.48%, Larsen & Toubro down by 4.17%, Vedanta down by 3.71% and Tata Power down by 3.67% were the top losers.

Meanwhile, the government has approved 19 FDI proposals worth Rs 2,165 crore, based on the recommendations of Foreign Investment Promotion Board (FIPB). The cleared approvals includes Mylan Laboratories’ FDI proposal worth Rs 128.77 crore. The pharma firm had sought prior approval for increase in the level of FDI in the company by existing non-resident shareholders, MP Laboratories (Mauritius) Ltd. And Mylan Luxembourg pursuant to a composite scheme of arrangement.

The approvals also included Rs 1,290 crore investment proposal of Bharti AXA Life and General Insurance, Rs 124-crore proposal of another pharma company Par Formulations Private and Curatio Healthcare's proposal of Rs 93.43 crore too has been approved.

The FIPB also cleared FCC Clutch India's proposal of 444.50 crore. FCC India had sought permission to acquire additional 50 per cent equity stake (represented by 39,50,000 equity shares) in FCC Rico from FCC Co Ltd, the consideration for which would be discharged by swap of shares wherein FCC India's equity shares would be issued to FCC Japan.

However, FIPB deferred 10 proposals including that of BASF Chemical India Pvt Ltd, Vivimed Labs Ltd and Sharekhan Ltd. It also rejected 12 proposals including Nickelodeon Asia Holdings Pte Ltd, Singapore, S Kumars Nationwide Limited and Warden Petrochem Pvt Ltd.

The CNX Nifty is currently trading at 8114.00, down by 210.80 points or 2.53% after trading in a range of 8100.55 and 8331.95. There was 1 stock advancing against 49 stocks declining on the index.

The lone gainer on Nifty was Bharti Airtel up by 1.73%. On the flip side, BHEL down by 5.10%, Ambuja Cement down by 4.87%, NTPC down by 4.55%, BPCL down by 4.35% and Larsen & Toubro down by 4.29% were the top losers.

Asian markets were trading mostly lower; Hang Seng down by 125.14 points or 0.45% to 27,630.40; Shanghai Composite down by 91.64 points or 2.13% to 4,207.07; KOSPI Index down by 27.65 points or 1.3% to 2,104.58; Straits Times down by 18.59 points or 0.54% to 3,452.60; FTSE Bursa Malaysia KLCI down by 13.74 points or 0.75% to 1,813.68; Jakarta Composite down by 12.35 points or 0.24% to 5,147.96 and Taiwan Weighted down by 1.93 points or 0.02% to 9,818.20. On the flip side, Nikkei 225 up by 11.62 points or 0.06% to 19,531.63 were the lone gainer amongst Asian pack.