Selling intensifies in noon deals; Sensex breaches 26,000 mark

Indian equity benchmarks have extended their downfall in noon deals with frontline gauges breaching their crucial 26,000 (Sensex) and 7,900 (Nifty) levels. Sentiments remained dampened since beginning on reports that the country’s growth rate declined to 7 per cent in the first quarter of 2015-16 even as the core sector output sputtered to a three-month low of 1.1 per cent in July. Sentiments also weighed down after the manufacturing sector grew at a slower pace in August as order flow turned sluggish and forced the companies to cut prices. Some concern also came with the India Meteorological Department’s report that monsoon has been deficient by 11 percent so far with August recording 22 percent less than normal rainfall, raising the prospect of lower foodgrains production for the Kharif season than 2014 if the situation does not improve in September.

Selling got intensified after European counters made an awful start with CCA, DAX and FTSE all trading with a cut of around a percent in early deals. Asian markets were trading mostly in red at this point of time after twin surveys showed China's manufacturing sector in the grip of its worst slump in several years, raising fresh fears about the health of its economy. Back home, selling remained both brutal and wide-based till noon deals as none of sectoral indices, barring software and technology, on BSE were spared. Counters, which featured in the list of worst performers, include banking, capital goods and consumer durables. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 570 shares on the gaining side against 1,788 shares on the losing side while 84 shares remain unchanged.

The BSE Sensex is currently trading at 25967.00, down by 316.09 points or 1.20% after trading in a range of 25913.57 and 26141.07. There were 5 stocks advancing against 24 stocks declining on the index while 1 stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 1.15%, while Small cap index down by 1.01%.

The gaining sectoral indices on the BSE were IT up by 0.78%, TECK up by 0.39% while, Bankex down by 2.46%, Capital Goods down by 1.93%, Consumer Durables down by 1.70%, Metal down by 1.38%, Realty down by 1.25% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.38%, Infosys up by 1.30%, Sun Pharma Inds. up by 1.06%, NTPC up by 0.54% and BHEL up by 0.04%. On the flip side, HDFC down by 2.83%, Axis Bank down by 2.77%, Larsen & Toubro down by 2.54%, HDFC Bank down by 2.36% and SBI down by 2.31% were the top losers.

Meanwhile, on the back of a boost in capital expenditure (capex) by the government, India’s fiscal deficit in the first four months of the current fiscal stood at 69.3% of the FY16 target compared to that of 61.2% same period last fiscal, according to the government data. The fiscal deficit came in at Rs 3.85 lakh crore for April-July period, while the deficit estimated in the Budget for the full year is Rs 5.56 lakh crore.

The Revenue deficit during the four months was over Rs 3.05 lakh crore, or 77.6% of the estimate. Further, the April-July net tax collection was Rs 1.54 lakh crore, which is 16.7% of the estimate for the full year. In the corresponding period last fiscal, the net tax revenue stood at 15% of that year’s target. Meanwhile, total expenditure of the government during April-July was nearly Rs 6 lakh crore, or 33.8% of the Budget estimate (BE) for the full year compared to 28.1% in the same period last year. Of the total expenditure, plan spending was over Rs 1.57 lakh crore and non-plan was over Rs 4.43 lakh crore.

For the 2015-16 fiscal, the government aims to restrict fiscal deficit to Rs 5.56 lakh crore, or 3.9% of the GDP. The fiscal deficit was Rs 5.01 lakh crore, or 4% of GDP, in 2014-15, down from 4.1% pegged in the revised estimate. Fiscal deficit is the difference between government revenue and expenditure and is expressed as a percentage of GDP.

The CNX Nifty is currently trading at 7868.80, down by 102.50 points or 1.29% after trading in a range of 7848.50 and 7929.10. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.50%, Infosys up by 1.32%, Cairn India up by 1.28%, Tech Mahindra up by 1.17% and Sun Pharma up by 0.95%. On the flip side, PNB down by 4.73%, Kotak Mahindra Bank down by 3.81%, Idea Cellular down by 3.43%, Bank of Baroda down by 3.30% and Yes Bank down by 3.15% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 tumbled 724.79 points or 3.84% to 18,165.69, Hang Seng slipped 164.94 points or 0.76% to 21,505.64, Taiwan Weighted dropped 157.36 points or 1.92% to 8,017.56, Jakarta Composite declined 63.15 points or 1.4% to 4,446.46, Shanghai Composite crashed 47.27 points or 1.47% to 3,158.72, KOSPI Index shed 27.26 points or 1.4% to 1,914.23 and Straits Times was down by 10.03 points or 0.34% to 2,911.41.

On the flip side, FTSE Bursa Malaysia KLCI was up by 4.17 points or 0.26% to 1,616.91.

European Markets were trading in red; Germany’s DAX lost 1.51%, France’s CAC declined 1.27% and UK’s FTSE was down by 0.86%.