Massacre continues on Dalal Street on global economic fears

Pressurized by feeble global cues, Indian equity benchmarks continue to witness bloodbath in the noon deals with frontline gauges tumbling below their crucial 26,300 (Sensex) and 8,000 (Nifty) levels. Sentiments remained dampened following fears of a slowdown in the Chinese economy following expectations of tapering demand for goods and services worldwide going forward. Depreciation in Indian rupee too weighed down sentiments. The rupee plunged by 66 paise to fall below the Rs 66 level against the dollar for the first time in almost two years in the afternoon trade today on sustained capital outflows even as the US currency weakened overseas.

Global cues too remained sluggish, with European counters making a awful start, CAC, DAX and FTSE all were trading with a cut of around three percent. Asian stocks dived to 3-year lows on Monday as a rout in Chinese equities gathered pace, hastening an exodus from riskier assets as fears of a China-led global economic slowdown roiled world markets. 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 realty, power and Infrastructure. Sectors like oil and gas, banking, capital goods, auto and consumer durables too witnessed slaughter. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 277 shares on the gaining side against 2,208 shares on the losing side while 45 shares remain unchanged.

The BSE Sensex is currently trading at 26279.07, down by 1087.00 points or 3.97% after trading in a range of 26212.91 and 26730.40. 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 4.43%, while Small cap index down by 5.13%.

The losing sectoral indices on the BSE were Realty down by 6.43%, Power down by 5.62%, INFRA down by 5.34%, Oil & Gas down by 5.23% and Bankex down by 5.17%, while there were no gainers on the index.

The top losers on the Sensex were Vedanta down by 7.34%, GAIL India down by 6.90%, BHEL down by 6.63%, Tata Steel down by 6.53% and ONGC down by 6.25%, while there were no gainers on the index.

Meanwhile, the much awaited Nepal-India petroleum pipeline of the 41-km Raxaul (India) - Amlekhgunj (Nepal) project is set to take-off with the signing of Memorandum of Understanding (MoU) between the two countries. Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan is on Nepal visit to sign the agreement to ensure unhindered supply of oil and gas to the land-locked Himalayan nation.

This project is estimated to cost Rs 275 crore and is expected to be completed in three years. Indian Oil Corporation (IOC) will provide Rs 200 crore while the remaining Rs 75 crore will be provided by Nepal Oil Corporation (NOC). Further, out of 41 km long petroleum pipeline about 39 km would lie in Nepal.

The project will be completed in two phases. In the first phase, a petroleum products pipeline from Raxaul to Amlekhgunj would be constructed, where IOC will bear the project cost. IOC has agreed to foot the cost in exchange for Nepal committing to buy products for at least 15 years. There will be a long term contract of 15 years (initial contract for five years extendable for two terms of five years each) between IOC and NOC.

This agreement would promote bilateral cooperation in the oil and gas sector and secure long-term supply of petroleum products to Nepal and promote friendly relations between the two countries. It would also help save transportation cost, reduce leakage, and unhindered supply of petroleum products

Last year Nepal had requested India during the visit of Prime Minister Narendra Modi to Nepal for the construction of this petroleum products pipeline. Bearing in mind the close and friendly relations between the two nations, this was agreed to by the Indian government.

The CNX Nifty is currently trading at 7972.05, down by 327.90 points or 3.95% after trading in a range of 7940.75 and 8060.05. There were 0 stocks advancing against 50 stocks declining on the index.

The top losers on Nifty were Vedanta down by 7.35%, GAIL India down by 6.97%, Yes Bank down by 6.83%, Tata Steel down by 6.64% and PNB down by 6.56%, while there were no gainers on the index.

All the Asian markets were trading in red; Hang Seng tumbled 1088.31 points or 4.86% to 21,321.31, Nikkei 225 cracked 895.15 points or 4.61% to 18,540.68, Taiwan Weighted declined 376.58 points or 4.84% to 7,410.34, Shanghai Composite crumbled 292.3 points or 8.33% to 3,215.45, Jakarta Composite dropped 201.46 points or 4.65% to 4,134.50, Straits Times fell 106.95 points or 3.6% to 2,864.06, KOSPI Index decreased 46.26 points or 2.47% to 1,829.81 and FTSE Bursa Malaysia KLCI was down by 32.68 points or 2.08% to 1,541.99.

European Markets were trading in red; Germany’s DAX lost 3.28%, France’s CAC declined 3.34% and UK’s FTSE was down by 2.56%.