Benchmarks extend losses; Realty, Infra drag

Indian equity markets extend their losses and continue to trade weak in late afternoon session on account of selling in frontline blue chip counters on account of slowdown in global growth. Today’s fall marks the fourth biggest crash in history in terms of absolute value. The rupee also came under pressure and it slumped over 1% to hit a fresh two-year low of 66.67 per dollar. Investors paid no heed towards Reserve Bank of India Governor Raghuram Rajan remarks who enlightened that India is better off than among emerging market countries. The macro-economic problems are under control, low inflation will give investors trust in markets. The governor added that the central bank will not hesitate to use reserves to reduce the volatility in currency. Traders were seen selling in Realty, Infra and Power sector stocks. In scrip specific development, Nestle India was trading firm in weak market after it stated that it is planning to bring back the popular instant noodles brand Maggi back in the market by end of this year subject to certain clearances.

On the global front, the Asian markets traded in red, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,950 and 26,200 levels respectively. The market breadth on BSE was negative in the ratio of 266:2379 while 39 scrips remained unchanged.

The BSE Sensex is currently trading at 26132.17, down by 1233.90 points or 4.51% after trading in a range of 26115.56 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 5.81%, while Small cap index down by 6.84%.

The losing sectoral indices on the BSE were Realty down by 8.53%, INFRA down by 6.89%, Power down by 6.81%, Oil & Gas down by 6.67% and PSU down by 6.06%, while there were no gainers.

The top losers on the Sensex were BHEL down by 8.84%, Tata Steel down by 8.62%, ONGC down by 8.60%, Vedanta down by 8.28% and GAIL India down by 8.24%.

Meanwhile, the government has received Rs 90,000 crore investment proposals for electronics manufacturing in the country in the last two months under the Modified Special Incentive Package Scheme (MSIPS), with significant interest in making mobile phones by both the local and foreign firms. Additional Secretary in Ministry of Communications and IT Ajay Kumar said that there is hardly any company which has not shown interest to manufacture in India and said India is already the fastest-growing Smartphone market and it is now also becoming the fastest growing manufacturing destination of phones in the world.

The global companies who have shown interest to start manufacturing in India are that of, Airbus, Phillips, Thomson, Samsung, LG and Flextronics. Besides, firms like HTC, Asus and Gionee have also evinced interest in setting up their manufacturing base in the country. However, players like Samsung, Micromax and Spice have been assembling handsets in India. Recently, Xiaomi and Motorola, along with Lenovo, have commenced assembling Smartphone in the country through contract manufacturing by Foxconn and Flextronics respectively.

In the last 12 months, the country had received investment proposals worth about Rs 1.10 lakh crore from various companies for electronics manufacturing under MSIPS. Out of the total, over 80% have been materialized in the last two months. The MSIPS policy was originally approved by the government in July 2012, which provides capital subsidy of 20% in SEZ or 25% in non-SEZ units engaged in manufacturing of electronics items. The scheme was for duration of three years which last month got extended to five years to boost electronics manufacturing.

According to the Department of Electronics and IT, the demand for electronics in India is expected to reach $400 billion by 2020, while the sector has potential to attract $100 billion investment and provide jobs to 28 million people.

The CNX Nifty is currently trading at 7915.40, down by 384.55 points or 4.63% after trading in a range of 7908.05 and 8060.05. There were 0 stocks advancing against 50 stocks declining on the index.

The top losers on Nifty were PNB down by 9.04%, Bank of Baroda down by 8.97%, Yes Bank down by 8.87%, Tata Steel down by 8.68% and BHEL down by 8.62%.

The European markets were trading in red; Hang Seng decreased 1158.05 points or 5.17% to 21,251.57, Nikkei 225 decreased 895.15 points or 4.61% to 18,540.68, Taiwan Weighted decreased 376.58 points or 4.84% to 7,410.34, Shanghai Composite decreased 297.84 points or 8.49% to 3,209.91, Jakarta Composite decreased 170.48 points or 3.93% to 4,165.47, Straits Times decreased 111.48 points or 3.75% to 2,859.53, KOSPI Index decreased 46.26 points or 2.47% to 1,829.81 and FTSE Bursa Malaysia KLCI decreased 35.18 points or 2.23% to 1,539.49.

The European markets were trading in red; UK’s FTSE 100 decreased 150.67 points or 2.44% to 6,036.98, Germany’s DAX decreased 264.22 points or 2.61% to 9,860.30 and France’s CAC decreased 117.13 points or 2.53% to 4,513.86.