Benchmarks trim losses; trade continues in red

Indian equity markets trimmed their losses but continued to trade weak in the late afternoon session on account of selling in frontline blue chip counters tracking economic developments in Greece. Fears that Greece may exit from the European Union loomed large as the European Central Bank and its creditors in Europe shut the door on extending a credit lifeline to Athens. The 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. Traders were seen selling in IT, Realty and TECK stocks. In scrip specific development, Tech Mahindra was trading under pressure after touching more than one-year low after the IT firm warned of a weak first quarter, partly due to higher US visa sponsorship costs for its employees.

On the global front, the Asian markets were trading in red, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was negative in the ratio of 604:1896 while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 27409.56, down by 402.28 points or 1.45% after trading in a range of 27209.19 and 27451.07. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.07%, while Small cap index down by 2.20%.

The losing sectoral indices on the BSE were IT down by 2.45%, Realty down by 2.27%, TECK down by 2.10%, Bankex down by 2.07% and INFRA down by 2.06%.

The top gainers on the Sensex were NTPC up by 0.69%, Hindustan Unilever up by 0.54%, ITC up by 0.06% and Bajaj Auto up by 0.03%.

On the flip side, Hindalco down by 3.81%, SBI down by 2.85%, Sun Pharma down by 2.70%, Wipro down by 2.65% and Tata Motors down by 2.49% were the top losers.

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 8254.50, down by 126.60 points or 1.51% after trading in a range of 8195.65 and 8262.85. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were BPCL up by 0.84%, NTPC up by 0.65%, Hindustan Unilever up by 0.55%, ITC up by 0.28% and Power Grid up by 0.25%.

On the flip side, Tech Mahindra down by 8.61%, Hindalco down by 3.80%, HCL Tech. down by 3.47%, SBI down by 2.96% and Yes Bank down by 2.80% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 696.89 points or 2.61% to 25,966.98, Taiwan Weighted decreased 666.79 points or 6.73% to 9,236.10, Nikkei 225 decreased 596.2 points or 2.88% to 20,109.95, Shanghai Composite decreased 139.84 points or 3.34% to 4,053.03, Jakarta Composite decreased 43.02 points or 0.87% to 4,879.98, Straits Times decreased 38.41 points or 1.16% to 3,282.49, KOSPI Index decreased 29.77 points or 1.42% to 2,060.49 and FTSE Bursa Malaysia KLCI decreased 20.22 points or 1.18% to 1,690.25.

The European markets were trading in red; Germany’s DAX decreased 336.9 points or 2.93% to 11,155.53, France’s CAC decreased 160.16 points or 3.17% to 4,899.01 and UK’s FTSE 100 decreased 101.78 points or 1.51% to 6,651.92.