Benchmarks trade deep in red; Sensex plunges over 450 points

After making a negative start, Indian equity benchmarks have plunged deep into red and are now trading with cut of around two percent, which dragged Sensex and Nifty below psychologically crucial 25,300 and 7,700 levels respectively, in absence of positive triggers and sustained selling activities by market-participants. Weakness in the other Asian peers too weighed on the sentiments as investors remained cautious ahead of the US non-farm payroll data due to be released later today. The session was also harrowing for broader indices, which were trading with losses of around 2.00%. Further, reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 394.31 crore on September 3, 2015 as per provisional data released by the stock exchanges, added to the negative milieu.  Investors failed to get any sense of relief with Minister of State, UAE stating that United Arab Emirates is keen to invest in India, especially in opportunities arising out of various initiatives announced by the government such as ‘Make in India’ and ‘Digital India.’

In the scrip specific development, Cipla was trading higher after the pharmaceutical company announced acquisition 100% of generic businesses in US for $550 million.

On the global front, US markets ended mostly higher, though relinquishing major early gains ahead of highly anticipated Friday employment report. The Asian markets were trading in red as caution prevailed before the release of the monthly US jobs report and the resumption of trading on Chinese stock markets next week.

Closer home, all the sectoral indices were reeling under pressures led by Realty, Bankex and Auto. The market breadth on BSE was negative in the ratio of 248:1416 while 50 scrips remained unchanged.

The BSE Sensex is currently trading at 25296.62, down by 468.16 points or 1.82% after trading in a range of 25240.33 and 25775.38. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.83%, while Small cap index down by 2.26%.

The losing sectoral indices on the BSE were Realty down by 3.37%, Bankex down by 2.94%, Auto down by 2.38%, Metal down by 2.27%, INFRA down by 2.23%, while there were no gainrs.

The top gainers on the Sensex were Cipla up by 1.15%, Wipro up by 0.33% and Lupin up by 0.02%. On the flip side, Tata Motors down by 3.82%, Vedanta down by 3.37%, Tata Steel down by 3.22%, Hindalco down by 2.98% and Axis Bank down by 2.95% were the top losers.

Meanwhile, the government has received over Rs 1 lakh crore investment proposals for manufacturing in the electronics sector. Communications and IT minister Ravi Shankar Prasad said that “We are promoting electronic cluster in a big way since last 14 months and have received investment proposals of Rs.1.07 lakh crore till now”Prasad further said that the government is promoting electronic clusters which will provide full eco-system to make certain products and states are competing with each other for setting them up. For the electronic clusters government provides assistance of up to 50 per cent of the project cost for new EMC which is subject to a ceiling of Rs 50 crore for 100 acres of land. For larger areas, pro-rata ceiling applies. As of July this year, government has approved two greenfield EMCs and accorded in-principle approval to 16 and three Common Facility Centres in brownfield clusters under the scheme.

The government also plans to give lot of incentives to the investors under Modified Special Incentive Package Scheme. The Modified Special Incentive Package Scheme provides subsidy for investments in capital expenditure which is 20 per cent for investments in special economic zones (SEZs) and 25 per cent in non-SEZs. It also provides for reimbursement of countervailing duty or excise for capital equipment for the non-SEZ units.  Besides, for setting up electronic chip manufacturing unit, government is allowing 200 per cent deduction on expenditure on research.

The minister further said that the government's 'Make in India programme' for the domestic market as also for exports is the essence of Digital India initiative, and appealed to stakeholders to make India hub for all kind of manufacturing. The minister noting that electronics manufacturing space has huge potential for employment generation has said that seven institutes of IT and electronics will be set up so that there is good human resource to supplement need of workforce in electronic manufacturing.

The CNX Nifty is currently trading at 7670.60, down by 152.40 points or 1.95% after trading in a range of 7654.25 and 7804.90. There were 3 stocks advancing against 47 stocks declining on the index.

The only gainers on Nifty were Cipla up by 0.98%, Wipro up by 0.26% and Bharti Airtel up by 0.01%. On the flip side, Bank Of Baroda down by 4.87%, Kotak Mahindra Bank down by 4.78%, Vedanta down by 4.27%, Tata Power down by 4.17% and PNB down by 4.13% were the top losers.

Asian markets were trading in red; Nikkei 225 decreased 275.14 points or 1.51% to 17,907.25Hang Seng decreased 92.89 points or 0.44% to 20,842.05, Taiwan Weighted decreased 56.16 points or 0.69% to 8,039.79, Straits Times decreased 38.1 points or 1.31% to 2,868.33, KOSPI Index decreased 25.84 points or 1.35% to 1,889.69, Jakarta Composite decreased 8.61 points or 0.19% to 4,424.50 and FTSE Bursa Malaysia KLCI decreased 4.98 points or 0.31% to 1,597.77.