Benchmarks make weak opening influenced by sluggish global cues

Extending their previous session’s fall, Indian equity markets made a weak opening, which dragged both the Sensex and Nifty below psychologically crucial 27,700 and 8,400 levels respectively, on sustained selling activities by market-participants and on account of weak global cues after China devalued the yuan. Meanwhile, the session was also harrowing for broader indices, which were trading with losses of around 1.50%. The sentiments were further weighed down by Indian rupee depreciating 45 paise to 64.64 against the US dollar in trade today. This was the lowest level the domestic currency hit since September 2013. Furthermore, foreign portfolio investors (FPIs) sold shares worth a net Rs 736.81 crore on August 11, 2015, as per provisional data released by the stock exchanges. Some cautiousness was also ahead of the announcement of key macroeconomic numbers, CPI and IIP due later during the day.
In scrip specific development, KEC International was trading higher after the company secured new orders worth Rs 838 crore in transmission and distribution as well as telecom cable businesses.

On the global front, US markets ended lower and the Dow fell more than 200 points in the wake of a surprise devaluation of the yuan by China. Asian markets were trading in red following China allowing the yuan to fall sharply for a second straight day, forcing investors to seek refuge in safe-haven government debt.

Back home traders were seen piling position in IT, TECK and Healthcare, while selling was witnessed in Metal, Oil & Gas, Realty, PSU and Auto. The market breadth on BSE was negative in the ratio of 523: 1323 while 51 scrips remained unchanged.

The BSE Sensex is currently trading at 27670.21, down by 195.88 points or 0.70% after trading in a range of 27668.45 and 27883.33. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.49%, while Small cap index lost 1.34%

The gaining sectoral indices on the BSE were IT up by 0.96%, TECK up by 0.49% and Healthcare up by 0.35%, while Metal down by 2.85%, Oil & Gas down by 2.36%, Realty down by 2.26%, PSU down by 2.25% and Auto down by 1.67% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 2.76%, Infosys up by 1.59%, Wipro up by 0.84%, Tata Steel up by 0.81% and TCS up by 0.77%. On the flip side, Hindalco down by 4.02%, Tata Motors down by 4.00%, Coal India down by 3.89%, Vedanta down by 3.51% and Bharti Airtel down by 2.67% were the top losers.

Meanwhile, National Statistical Commission (NSC) chairman Pronab Sen, clearing the air over the much debated calculation of the new GDP numbers has said that Central Statistics Office (CSO) is following the correct methodology for computing national accounts and is on the right track. He said that 'As far as calculation of the GDP numbers is concerned, the CSO is on the right track.'

Dismissing the criticism about the method adopted by the CSO in calculating growth numbers, Sen said that 'They have implemented the procedure and methodology approved by the Commission and followed its instruction for calculating the GDP numbers.”

The commission led by Sen is examining the new growth numbers arrived at by the CSO and is in the process of finalising a report on new GDP numbers and methodology used to calculate it. He however said that, we have not looked into the implication of the new GDP numbers so far. We would soon look at this aspect also and after that we will finalise our report on GDP numbers.

CSO updated the base year used for marking trends in the economy and switched to a market-price calculation of gross domestic product, by which the economy grew by 6.9% in the year that ended last March (2013-14). Using the previous methodology, GDP expansion that year was 4.7%. Since January 2010, the base year for India’s statisticians had been the 12 months that ended in March 2005, but now it was changed to the year that ended March 2012. CSO has estimated economic growth at 7.3 percent for 2014-15, slightly lower than its earlier advance estimate of 7.4 percent. After the changes, various economic experts raised doubts about the accuracy of the new series. Even the Parliamentary Standing Committee on Finance was not convinced about the new growth projections.

The CNX Nifty is currently trading at 8396.95, down by 65.40 points or 0.77% after trading in a range of 8395.75 and 8446.95. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 3.05%, Infosys up by 1.20%, HCL Tech. up by 1.01%, Wipro up by 0.79% and TCS up by 0.77%. On the flip side, NMDC down by 4.18%, Hindalco down by 4.12%, Tata Motors down by 3.97%, Coal India down by 3.87% and BPCL down by 3.70% were the top losers.

Asian markets were trading in red; Hang Seng decreased 397.02 points or 1.62% to 24,101.19, Nikkei 225 decreased 235.88 points or 1.14% to 20,484.87, Jakarta Composite decreased 126.77 points or 2.74% to 4,495.82, Taiwan Weighted decreased 118.77 points or 1.41% to 8,275.37, Straits Times decreased 82.24 points or 2.61% to 3,070.82, KOSPI Index decreased 23.45 points or 1.18% to 1,963.20, FTSE Bursa Malaysia KLCI decreased 21.26 points or 1.3% to 1,615.45 and Shanghai Composite decreased 17.61 points or 0.45% to 3,910.30.