Benchmarks trade in red in early deals; Nifty slips below 8150 mark

After making a flat opening, Indian equity markets are now trading with loses of over quarter a per cent on sustained selling by fund and retail investors, which dragged both the Sensex and Nifty below their psychological 26550 and 8150 levels. Weakness in the other Asian peers too weighed on the sentiments after sluggish China manufacturing data. Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 1464.89 crore on Friday as per provisional data released by the stock exchanges. Besides, Rupee opened lower against the dollar on Monday and was trading at 65.43, down 16 paise at the Interbank Foreign Exchange, on sustained foreign fund outflows amid increased demand for the US currency from importers that too kept pressurizing the sentiment. Additionally, India Ratings scaled down its GDP growth forecast for this fiscal by 20 basis points to 7.5 percent, citing lower agriculture output on account of deficient rainfall that added negative milieu. Meanwhile, IMF said that India needs to take further policy action to support external and fiscal stability in coming years and should focus on revenue-side measures and adopt additional structural reforms to sustain its strong growth.  

In the scrip specific development, Indian Overseas Bank dipped 16% on the BSE, after the state-owned bank reported a net loss of Rs 551 crore for the quarter ended September, 2015 (Q2) against a net loss of Rs 246 crore a year ago.

On the global front, the US markets ended lower on Friday. The Asian markets were trading mostly in red, following the weak cues from Wall Street and as data showed that activity in China's vast manufacturing sector continued to contract in October for an eight straight month.

Closer home traders were seen piling up position in Auto and Banks, while selling was witnessed in Capital Goods, Healthcare, Metal, Power and PSU. The market breadth on BSE was negative in the ratio of 712: 855 while 58 scrips remained unchanged. 

The BSE Sensex is currently trading at 26537.78, down by 119.05 points or 0.45% after trading in a range of 26527.00 and 26824.30. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.40%, while Small cap index was lower by 0.21%.

The gaining sectoral indices on the BSE were Auto up by 0.41% and Bankex up by 0.10%, while Capital Goods down by 1.22%, Healthcare down by 1.12%, Metal down by 0.96%, Power down by 0.59%, PSU down by 0.56% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.75%, Tata Motors up by 1.57%, ICICI Bank up by 1.23%, Axis Bank up by 0.93% and Maruti Suzuki up by 0.62%. On the flip side, Bajaj Auto down by 2.73%, Sun Pharma down by 2.69%, Larsen & Toubro down by 2.06%, NTPC down by 2.03% and Hindalco down by 2.02% were the top losers.

Meanwhile, in an indication that the government is readying a reform plan to be implemented soon, the Finance minister Arun Jaitley has said that the government was looking to ease foreign direct investment rules and reduce the number of approvals needed to speed up investment. Jaitley said that “Having opened most sectors for foreign direct investment, time has come to examine whether some of the conditionalities on which FDI investment is permitted have become anachronic. We need to cut down on the number of permissions required so that the time lag between the decision to invest and the actual investment can be shortened significantly.”

Jaitley further said the Centre issued two important ordinances including changes in arbitration law to make arbitrations cheaper, faster and free from judicial intervention. He said that a new bankruptcy law was being readied to provide for ease of exiting along with the ease of opening business. He added that when you compulsorily need a completion certificate for a building, the permission required for start of construction should be replaced by a regulatory mechanism. These additional changes will further improve India's ranking for ease of doing business,” he said while complementing states for the changing work culture.

Recently the World Bank has upped India’s ranking in the Ease of Doing Business by 12 positions. Regarding that Jaitley had said that considering the number of steps taken in the last 17 months, India’s position should have moved significantly higher. I understand that all steps have not been factored in since the World Bank criteria has a cut-off date and it also waits for announcements to translate into action before they can be factored.

The World Bank report ranked India at 130 out of 189 country on the ease of doing business, up 12 places from 142nd rank last year. In the World Economic Forum’s Global Competitiveness Report in September, India’s ranking moved up 16 positions to 55th on a global index of the world’s most competitive economies.

The CNX Nifty is currently trading at 8036.05, down by 29.75 points or 0.37% after trading in a range of 8025.25 and 8060.65. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.34%, Tata Motors up by 1.38%, ICICI Bank up by 0.96%, Axis Bank up by 0.84% and HCL Tech. up by 0.50%. On the flip side, Bajaj Auto down by 2.73%, Sun Pharma Inds. down by 2.50%, NTPC down by 2.22%, Larsen & Toubro down by 2.17% and Adani Ports &Special down by 1.79% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 347.51 points or 1.82% to 18,735.59, Hang Seng decreased 112.22 points or 0.5% to 22,527.82, Jakarta Composite decreased 2.21 points or 0.05% to 4,452.97, FTSE Bursa Malaysia KLCI decreased 0.95 points or 0.06% to 1,664.76 and Shanghai Composite decreased 0.74 points or 0.02% to 3,381.82.

On the flip side, KOSPI Index increased 3.86 points or 0.19% to 2,033.33 and Taiwan Weighted increased 34.16 points or 0.4% to 8,588.47.