Bears run berserk in late morning session; Nifty sinks below 7,700 levels

With the bears running berserk and hammering down stocks across the board, Indian equity benchmarks have plunged deeper into the red in late morning session. Sensex slipped by more than 480 points, while Nifty lower by 146 points. Besides, the broader markets too failed to show any kind fervor and traded with large cuts of over two percent. Sentiments remained down-beat with the report that India's June-September monsoon rains are likely to be below the prior forecast of 88 percent of the long-term average, which could make it the driest year since 2009 and reduce farm output. Trading sentiments weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 394.31 crore on September 03, 2015.  Also, International Monetary Front (IMF) has said steep decline in inflation has created a room for the Reserve Bank of India to cut rates, but cautioned against upside risks to inflation. 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.’

On the global front, Asian markets were trading in red as caution about a US jobs report jostled with signals from the European Central Bank that it is willing to take further steps to shore up the European economy. US stocks closed narrowly mixed, attempting to extend a recovery as investors eyed fluctuations in oil prices and awaited the final jobs report before the Federal Reserve's key September meeting. Back home, rupee weakened to 66.39 in the late morning trade due to heavy capital outflows from the equity market despite dollar's weakness against other currencies overseas.

Back on street, all the sectoral indices were trading negative. Realty, Bank, Power and infrastructure stocks were among the worst hit in the sell-off on the Indian bourses this morning. In scrip specific development, shares of Cipla have surged in early morning trade in otherwise weak market after the pharmaceutical company announced acquisition 100% of generic businesses in US for $550 million. On the other hand, shares of Amtek Auto have dipped over 9 percent, extending its Thursday’s 35% fall after foreign institutional investors (FIIs) sold nearly four million equity shares of the company through open market. The market breadth on BSE was negative, out of 2158 stocks traded, 288 stocks advanced, while 1808 stocks declined on the BSE.

The BSE Sensex is currently trading at 25284.59, down by 480.19 points or 1.86% after trading in a range of 25193.41 and 25775.38. 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 2.20%, while Small cap index down by 2.53%.

There was no gainer on the BSE Sectoral front, however, prominent losers on the BSE Sectoral front were Realty down by 5.27%, Bankex down by 3.33%, Power down by 3.04%, Infra down by 2.94%, and Consumer Durables down by 2.64%.

The top gainers on the Sensex were Lupin up by 1.07%, Cipla up by 0.89% and Hindustan Unilever up by 0.14%. On the flip side, Vedanta down by 4.28%, Tata Motors down by 4.11%, ICICI Bank down by 4.07%, Tata Steel down by 3.88% and Axis Bank down by 3.78% were the top losers.

Meanwhile, in a bid to achieve and maintain high growth of more than 8 per cent over next two decades, President Pranab Mukherjee has said that India should invest in Infrastructure Human and social capital, as it appears to be one of the few bright spots in the otherwise gloomy global economy. The President further stated that India will achieve a growth rate of between 8 and 8.5 per cent, in the current financial year, on the back of moderating inflation rates, lower current account and fiscal deficit, strong foreign currency reserve as well as stable tax policies.

Besides, Mukherjee highlighted that the growth prospects for the engineering sector is enormous, which accounts for over 22 per cent of India's total merchandise export. Engineering exports contribute about 35 per cent of the total output in the country, and is one of the highest foreign exchange earners. The low cost human resource coupled with high quality engineering aptitude are the key driver of rising country’s engineering exports. Furthermore he added that in order to draw comprehensive and inclusive strategies for promoting India's engineering exports, the thrust will now have to be on product quality, market and product diversification. However, the share of sector's export in the world market is appallingly low, which is little more than 1 per cent.

He also highlighted that in the repercussion of the global recession, Indian economy has started showing signs of revival. The GDP growth improved from 5.1 per cent in 2012-13 to 6.9 per cent in 2013-14 and 7.3 per cent in the financial year 2015. 

The CNX Nifty is currently trading at 7676.25, down by 146.75 points or 1.88% after trading in a range of 7639.50 and 7804.90. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.25%, Lupin up by 1.15%, Hindustan Unilever up by 0.58%, Coal India up by 0.20% and ITC up by 0.06%. On the flip side, NMDC down by 5.79%, Bank of Baroda down by 5.30%, Tata Power down by 4.84%, PNB down by 4.66% and Vedanta down by 4.27% were the top losers.

Asian markets were trading in red; Nikkei 225 was down by 2.25%, Hang Seng down by 0.6%, Taiwan Weighted down by 0.99%, Straits Times down by 1.57%, KOSPI Index down by 1.57%, Jakarta Composite down by 0.05% and FTSE Bursa Malaysia KLCI down by 0.41%.