Benchmarks make gap-down opening amid weak global cues

Extending their previous session’s fall, markets have made a gap-down opening and are trading in red tailing the sell-off across Other Asian peers, as Greece failed to clinch a deal with its international lenders over the weekend to avert a default. At present, Sensex and Nifty were trading below the crucial 27,350 and 8,250 levels respectively, with losses of around two percent. Meanwhile, the session was also harrowing for broader indices, which were trading with losses of over 2.00%. Sentiment remained down-beat with the observation of the Bank for International Settlements (BIS), who raising the red flag over interest rates remaining “extraordinarily low” globally has said that easy monetary regimes are resulting in a build-up of financial vulnerabilities. Depreciation in Indian rupee against dollar too weighed down sentiments. The rupee weakened by 20 paise to 63.84 against the US dollar in early trade today at the Interbank Foreign Exchange.

On the global front, the US markets ended mostly lower on Friday as traders remained cautious on the situation in Greece, the debt-laden country and its creditors continue to struggle to reach an agreement. Asian markets were trading in red as tremors from Greece shook sentiment across the globe.

Back home, all the sectoral indices were trading in the negative territory with BSE Realty leading the downfall by nearly 3%. The market breadth on BSE was negative in the ratio of 271: 1449 while 50 scrips remained unchanged.

The BSE Sensex is currently trading at 27306.95, down by 504.89 points or 1.82% after trading in a range of 27249.67 and 27451.07. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.19%, while Small cap index lost 2.33%.

The top losing sectoral indices on the BSE were Realty down by 2.98%, Bankex down by 2.67%, Capital Goods down by 2.31%, Auto down by 2.19% and INFRA down by 2.18%.

The only gainer on the Sensex was ITC up by 0.08%. On the flip side, Tata Motors down by 3.51%, SBI down by 3.30%, Hindalco down by 2.86%, Axis Bank down by 2.76% and ICICI Bank down by 2.75% were the top losers.

Meanwhile, after the launch of three schemes by Prime Minister Narendra Modi, operational guidelines have been set by the Urban Development Ministry for execution, approval of projects under these three missions (Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All).

For AMRUT scheme, a set of 11 reforms need to be executed in 4 years, which includes promoting e-governance, improving collection of various taxes, fee and user charges, augmenting double entry accounting, constitution and professionalization of municipal cadre, preparation of GIS-based master plans, devolution of funds and functionaries to urban local bodies, review of building by-laws, setting up financial intermediaries for pooling and disbursement of resources, credit rating of urban local bodies, energy and water audit and achieving Swachh Bharat Mission. It also stated that, States need to transfer funds to Urban local bodies within 7 working days of transfer by the Centre. Funds will be allocated  according to the urban population and number of towns/cities in each State/UT.

Ministry has stated that the central resources for Smart Cities mission will be used only for infrastructure projects that have larger public benefits. Special Purpose Vehicles (SPVs) will be provided for implementation of Smart City plans with 50-50 equity of States and Urban local bodies. According to the guidelines, 500 acres is the minimum area norm for retrofitting; 50 acres for re-development; 250 acres for Greenfield projects. The criteria will be 50 % for North-Eastern and Himalayan States. About 10 per cent of energy needs are to be met from renewable sources, 80 % of building construction to be green and 35 % of housing in green field projects to be for Economically Weaker Section (EWS), in smart cities. The cities which are been selected will be provided Rs 100cr per year.

In the scheme of Housing for all, the ownership of the houses will be in the name of woman or jointly with husband. It also stated that the houses of 30sq. m carpet area to be built for EWS category. If there is non availability, the States can accept their beneficiaries and increase the area while meeting the additional expenses. Rs 1 lakh per house will be provided by the Centre for slum redevelopment project in the State to make them operable. Once the loan is sanctioned to the beneficiary an interest subvention at 6.50% will be paid soon in order to bring down the EMI.

The CNX Nifty is currently trading at 8226.05, down by 155.05 points or 1.85% after trading in a range of 8207.10 and 8248.05. There was 1 stock advancing against 49 stocks declining on the index.

The only gainer on Nifty was BPCL up by 1.50%, while SBI down by 3.49%, Bank Of Baroda down by 3.46%, Tata Motors down by 3.43%, PNB down by 3.02% and Hindalco down by 2.99% were the top losers.

Asian markets were mostly trading in red; Hang Seng decreased 624.46 points or 2.34% to 26,039.41, Nikkei 225 decreased 419.7 points or 2.03% to 20,286.45, Taiwan Weighted decreased 226.12 points or 2.39% to 9,236.45, Shanghai Composite decreased 157.4 points or 3.75% to 4,035.48, Jakarta Composite decreased 54.89 points or 1.12% to 4,868.11, Straits Times decreased 42.14 points or 1.27% to 3,278.76, KOSPI Index decreased 29.89 points or 1.43% to 2,060.37 and FTSE Bursa Malaysia KLCI decreased 18.45 points or 1.08% to 1,692.02.