Selling intensifies, benchmarks decline around 2%

Indian equity benchmarks have extended their downfall in noon deals with frontline gauges breaching their crucial 25,300 (Sensex) and 7,700 (Nifty) levels. Sentiments remained down-beat after exporters body FIEO said that the decline in outbound shipments has “pulled down” India's GDP growth in the April-June quarter by over 3 percent. Selling got intensified after European counters made an awful start with CAC, DAX and FTSE all trading in red with a cut of over a percent in early deals. Sharp sell-off in the Asian peers continues to weigh the investors’ sentiment. Caution continues to envelope ahead of the US jobs data due to be released later today that may dictate the timing of a rate hike by the US Fed.

Back home, selling is both brutal and wide-based as none of sectoral indices on BSE are spared. Counters, which featured in the list of worst performers, include realty, power, infrastructure and banking. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 373 shares on the gaining side against 2,005 shares on the losing side while 81 shares remain unchanged.

The BSE Sensex is currently trading at 25259.47, down by 505.31 points or 1.96% after trading in a range of 25193.41 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 2.30%, while Small cap index slumped by 2.60%.

The top losing sectoral indices on the BSE were Realty down by 4.05%, Power down by 3.32%, INFRA down by 3.24%, Bankex down by 2.90%, Consumer Durables down by 2.86%, while there were no gainers on the index.

The top gainers on the Sensex were Bharti Airtel up by 0.48% and Lupin up by 0.02%. On the flip side, Vedanta down by 4.39%, Tata Steel down by 3.98%, Tata Motors down by 3.72%, Axis Bank down by 3.71% and ICICI Bank down by 3.67% were the top losers.

Meanwhile, commenting on the GDP data for the April-June, 2015 quarter which came at 7%, Federation of Indian Export Organizations (FIEO) has said that decline in merchandise exports by 16.75% which contributes about 15% of GDP and service exports by 7.08%, with a share of about 7.5% in GDP had pulled down the GDP growth by over 3%. FIEO President S C Ralhan, has said that the exports showed even the modest growth the GDP growth for the quarter would have touched 10%, meeting the aspiration of people.

Ralhan further stated that only if exports show an overall growth of at least 10% during the current fiscal the country will be able to achieve 8% growth in 2015-16. This at the moment looks challenging as first four months have produced negative results.

He said that interest subvention for exports should be introduced immediately and transition problems relating to schemes under new Foreign Trade Policy must be addressed expeditiously. Furthermore all the agencies should be involved in exports to work in tandem to facilitate exports. While looking at the problem of exports sector, the refund of VAT, CENVAT and Duty Drawback should be done immediately at the time of shipment. The base effect will help address exports decline in coming months, the volatility in Rupee will keep exporters on their toes, though order booking position has improved marginally.

The CNX Nifty is currently trading at 7661.10, down by 161.90 points or 2.07% after trading in a range of 7639.50 and 7804.90. There were 3 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 0.62%, Lupin up by 0.21% and Cipla up by 0.01%. On the flip side, NMDC down by 5.44%, Tata Power down by 5.43%, Vedanta down by 4.73%, Yes Bank down by 4.48% and Tata Steel down by 4.13% were the top losers.

All the Asian markets were trading in red; Nikkei 225 declined 390.23 points or 2.15% to 17,792.16, Taiwan Weighted decreased 95.35 points or 1.18% to 8,000.60, Hang Seng slipped 46.99 points or 0.22% to 20,887.95, Straits Times dropped 36.36 points or 1.25% to 2,870.07, KOSPI Index fell 29.49 points or 1.54% to 1,886.04, FTSE Bursa Malaysia KLCI sipped 8.6 points or 0.54% to 1,594.15, Shanghai Composite shed 6.46 points or 0.2% to 3,160.17 and Jakarta Composite was down by 2.24 points or 0.05% to 4,430.87.

European Markets were trading in red; Germany’s DAX tumbled 1.24%, France’s CAC dropped 1.24% and UK’s FTSE was down by 1.11%