Benchmarks erase gains; Nifty slips below 7,850 mark

Indian equity markets erased all gains and started trading in red in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were under pressure after Asian Development Bank stated that weaker growth in China this year is expected to cause a slowdown in the rest of Asia. It added that Southeast Asia was bearing the brunt of China’s slowdown, placing the growth in Southeast Asia this year at 4.4%, before rising to 4.9% in 2016. Traders were seen piling position in Consumer Durables stocks while selling was witnessed in Power, Metal and Capital Goods sector stocks. In the scrip specific development, Amtek Auto was trading in red after the company defaulted on Rs 800 crore worth of bond payment. The default raised risks of adding nearly Rs 8,000 crore potential bad loans to the Indian banking system.  The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2015 series to next month i.e. October 2015 series. The near month September 2015 derivatives contracts will expire on Thursday i.e. September 24, 2015.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,850 and 25,800 levels respectively. The market breadth on BSE was negative in the ratio of 1024:1483 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 25749.40, down by 443.58 points or 1.69% after trading in a range of 25749.33 and 26339.10. 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 1.09%, while Small cap index down by 0.65%.

The gaining sectoral indices on the BSE was Consumer Durables up by 0.49%, while Power down by 2.99%, Metal down by 2.95%, Capital Goods down by 2.65%, Realty down by 2.23% and Bankex down by 2.21% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 0.75%, Mahindra & Mahindra up by 0.73% and Wipro up by 0.63%.

On the flip side, Vedanta down by 5.38%, Hindalco down by 5.26%, NTPC down by 4.34%, Larsen & Toubro down by 3.53% and Tata Motors down by 3.48% were the top losers.

Meanwhile, US Commerce Secretary Penny Pritzker at the event organized by the Carnegie Endowment for International Peace, a top American think tank, has said that ease of doing business, a step initiated by Prime Minister Narendra Modi, is a key to boosting Indo-US bilateral trade and also achieve the goal of increasing it to $500 billion. Pritzker further stated that both the countries can only succeed by working together while calling for a heightened engagement between the private sectors of the two countries. Trade ties between the two countries have never been better and the two-way commerce has nearly tripled in recent years with India becoming the fifth fastest source if FDI to America. However, even with these positive steps, India is only America's 11th largest trading partner and 18th largest export market. The commercial relationship between the two countries has not lived up to their enormous potential.

Besides, top corporate leaders from both the countries were scheduled to meet under India-US CEOs Forum to come out with their recommendations to the two governments. The initial work plan focusses on the joint priorities of the two countries, ease of doing business, infrastructure development, innovation and entrepreneurship, standards and global supply chain.

She said that the main objective is to make it easier for foreign and domestic firms to do business in India and the US to deepen the ties of trade and commerce and to strengthen the bilateral commercial bonds in ways that benefits workers and businesses in both countries. By working on these, the two countries could have an extraordinary opportunity to help Modi achieve his vision of lifting hundreds and millions of Indians out of poverty and into the middle class.

The CNX Nifty is currently trading at 7837.55, down by 139.55 points or 1.75% after trading in a range of 7820.90 and 8021.60. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 0.65%, Wipro up by 0.30%, Infosys up by 0.10% and Maruti Suzuki up by 0.02%.

On the flip side, Hindalco down by 5.44%, Vedanta down by 5.34%, NTPC down by 4.97%, Power Grid down by 3.66% and Tata Motors down by 3.62% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 17.38 points or 0.88% to 1,982.06, Shanghai Composite increased 29.08 points or 0.92% to 3,185.62, Hang Seng increased 39.65 points or 0.18% to 21,796.58 and Taiwan Weighted increased 58.88 points or 0.71% to 8,365.92.

On the other hand, Jakarta Composite decreased 32.49 points or 0.74% to 4,343.59, FTSE Bursa Malaysia KLCI decreased 8.09 points or 0.49% to 1,631.38 and Straits Times decreased 2.09 points or 0.07% to 2,880.18. Nikkei stock exchange was closed on account of National holiday.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 107.44 points or 1.76% to 6,001.27, Germany’s DAX decreased 163.95 points or 1.65% to 9,784.56 and France’s CAC decreased 96.64 points or 2.11% to 4,488.86.