Benchmarks make a gap down opening; Nifty tests 8250 level

With a gap-down opening Indian equity markets have enlarged their previous session losses and are now trading with a cut of around one and half a percent, on account of sustained selling activities by market-participants amid weak global cues, following a survey on China's manufacturing sector which slumped to a six-and-a-half-year low. Sentiment also remained weak on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 1007.26 crore on August 20, 2015, as per provisional data released by the stock exchanges. Further, depreciation in Indian rupee against dollar too weighed down markets. The rupee weakened by 27 paise to 65.81 against the US dollar in early trade today at the Interbank Foreign Exchange due to sustained capital outflows by foreign funds even as the US currency weakened overseas. At present, Sensex and Nifty were trading below the crucial 27,250 and 8,300 levels respectively.  Apart from blue chips, broader indices too were equally weak with both mid cap and small cap indices trading down by 1.26% and 1.29% respectively. In scrip specific development, Den Networks was trading higher after the company received nod from the Foreign Investment Promotion Board (FIPB) to increase foreign investment limit by upto 74%.

On the global front, US markets ended lower as markets were buffeted by worries about a slowdown in global growth. Asian markets were trading in red tracking losses in the US markets.

Back home all the sectoral indices, barring IT, were trading in red led by Auto, Capital Goods and Bankex. The market breadth on BSE was negative in the ratio of 302:1542, while 54 scrips remained unchanged. 

The BSE Sensex is currently trading at 27212.02, down by 395.80 points or 1.43% after trading in a range of 27131.44 and 27442.82. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.26%, while Small cap index lost 1.29%.

The lone gaining sectoral index on the BSE was  IT up by 0.39%, while Auto down by 2.56%, Capital Goods down by 2.21%, Bankex down by 2.01%, INFRA down by 1.90% and PSU down by 1.81% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.07%, TCS up by 0.93% and Coal India up by 0.21%. On the flip side, Bharti Airtel down by 4.35%, Tata Motors down by 3.87%, Vedanta down by 3.55%, GAIL India down by 3.34% and Mahindra & Mahindra down by 3.25% were the top losers.

Meanwhile, with an aim to curb tax evasion and avoidance, Union Cabinet chaired by Prime Minister Narendra Modi approved signing of agreement with Seychelles for exchange of information with respect to taxes. This agreement will enable the authorities of both the countries to provide assistance through the exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of two countries concerning taxes.

The agreement provides for a Mutual Agreement Procedure for resolving any difference or for agreeing on procedures and will not have any financial implications. However, as per Article 9 of the agreement, only in the event of extraordinary costs exceeding $500, the Government of India will bear the same. Further, the information received under the agreement will be confidential and will be disclosed only to the persons or authorities concerned with assessment, collection, enforcement, prosecution or determination of appeals, in relation to taxes covered under the agreement.

Earlier, India has signed similar bilateral agreements for Exchange of Tax Information with Argentina, Bahamas, Bahrain, Belize, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Guernsey, Isle of Man, Jersey, Liberia, Liechtenstein, Macao, Monaco and San Marino.

The CNX Nifty is currently trading at 8252.60, down by 120.15 points or 1.44% after trading in a range of 8225.05 and 8305.40. There were 2 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.36% and TCS up by 1.04%. On the flip side, Yes Bank down by 4.73%, Bharti Airtel down by 4.34%, Tata Motors down by 3.58%, Vedanta down by 3.55% and GAIL India down by 3.31% were the top losers.

Asian markets were trading in red; Hang Seng decreased 519.53 points or 2.28% to 22,237.94, Nikkei 225 decreased 441.28 points or 2.2% to 19,592.24, Taiwan Weighted decreased 191.14 points or 2.38% to 7,838.67, Shanghai Composite decreased 111.47 points or 3.04% to 3,552.82, Jakarta Composite decreased 83.98 points or 1.89% to 4,357.93, Straits Times decreased 59.16 points or 1.97% to 2,950.62, KOSPI Index decreased 42.56 points or 2.22% to 1,871.99 and FTSE Bursa Malaysia KLCI decreased 1.43 points or 0.09% to 1,575.98.