Bloodbath continues on Dalal Street in noon deals

Indian equity benchmarks continued to witness bloodbath in noon deals as sentiments remained down-beat as Greece looked set to default on its debt repayment this week, sparking concerns about foreign selling in emerging markets. Sentiments also remained dampened after foreign portfolio investors sold shares worth a net Rs 203.74 crore during the previous trading session, as per provisional data released by the stock exchanges. Besides, depreciation in the rupee, which turned lower by 24 paise to 63.88 against the dollar in early trade at the forex market, too weighed on sentiments.

Global cues too remained sluggish with European markets opening all in red with FTSE, CAC and DAX all trading with a deep cut of between 2-5 percentage points. All the Asian counters were reeling under pressure at this point of time as Greece looked set to default on its debt repayment this week, forcing Athens to impose capital controls to halt bank runs. Back home, selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include banking, infrastructure and consumer durables. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 480 shares on the gaining side against 1,896 shares on the losing side while 104 shares remain unchanged.

The BSE Sensex is currently trading at 27282.35, down by 529.49 points or 1.90% after trading in a range of 27209.19 and 27451.07. There were 0 stocks advancing against 30 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.45%, while Small cap index down by 2.55%.

The losing sectoral indices on the BSE were Realty down by 2.79%, Bankex down by 2.61%, Infrastructure down by 2.58%, Consumer Durables down by 2.53% and Metal down by 2.36%, while there were no gainers on the BSE.

The top losers on the Sensex were Hindalco down by 4.49%, Sun Pharma down by 3.25%, SBI down by 3.23%, BHEL down by 2.95% and Cipla down by 2.86%, while there was no gainer on the index.

Meanwhile, the Bank for International Settlements (BIS) has raised the red flag over interest rates remaining “extraordinarily low” and said that easy monetary regimes are resulting in a build-up of financial vulnerabilities. In its annual report, BIS said globally, interest rates have been extraordinarily low for an exceptionally long time, in nominal and inflation-adjusted terms, against any benchmark.

The global banking regulators' body has said that globally, interest rates have been extraordinarily low for an exceptionally long time, in nominal and inflation-adjusted terms, against any benchmark. 'Such low rates are the most remarkable symptom of a broader malaise in the global economy: the economic expansion is unbalanced, debt burden and financial risks are still too high, productivity growth too low, and the room for maneuvering in macroeconomic policy too limited.

BIS has stated that this malaise also reflects the failure to come to grips with financial booms and busts that leave deep and enduring economic scars. It added that “The international monetary and financial system has spread easy monetary and financial conditions in the core economies to other economies through exchange rate and capital flow pressures, furthering the build-up of financial vulnerabilities.'

BIS also said that there should be increased reliance on structural policies rather than demand management policies, adding that such an approach would help “abandon the debt-fuelled growth model that has acted as a political and social substitute for productivity-enhancing reforms.” The BIS report, for April 2014 to March 2015, said central banks outside the major advanced economies were left to factor these very accommodative, but increasingly divergent, monetary policies into their own policy decisions.

The CNX Nifty is currently trading at 8216.85, down by 164.25 points or 1.96% after trading in a range of 8195.65 and 8248.05. There was 1 stock advancing against 49 stocks declining on the index.

The lone gainer on Nifty was BPCL up by 0.77%, while Tech Mahindra down by 6.38%, Hindalco down by 4.53%, HCL Tech down by 3.42%, SBI down by 3.28% and Sun Pharma down by 3.17% were the top losers.

Asian markets were trading in red; Hang Seng decreased 741.45 points or 2.78% to 25,922.42, Nikkei 225 tumbled 596.2 points or 2.88% to 20,109.95, Taiwan Weighted declined 226.47 points or 2.39% to 9,236.10, Shanghai Composite crumbled 156.68 points or 3.74% to 4,036.20, Jakarta Composite dropped 59.09 points or 1.2% to 4,863.91, Straits Times shed 44.98 points or 1.35% to 3,275.92, KOSPI Index fell 29.77 points or 1.42% to 2,060.49 and FTSE Bursa Malaysia KLCI was down by 19.28 points or 1.13% to 1,691.19.

The European markets were trading in red; Germany’s DAX slumped 4.35%, France’s CAC tumbled 4.34% and UK’s FTSE 100 was down by 2.27%.