Global worries drag benchmarks lower; Sensex breaches 25,500 mark

Wednesday turned out to be a disappointing session for the Indian equity indices which got pounded by around one and a half percentage point, as investors sold stocks across sectors amid global growth concerns. The barometer gauges traded near the neutral lines till noon deals but a sharp wave of selling, which emerged in last leg of trade, dragged the major indices below their crucial 7,750 (Nifty) and 25,500 (Sensex) levels. Selling was both brutal and wide-based as none of sectoral indices on BSE, except consumer durables, were spared. Counters, which featured in the list of worst performers, include software, banking, technology and metal.

Sentiments remained dampened on report that India's exports declined for the eleventh month running in October, highlighting the stiff competition faced by the country in a weak global economy. Traders even overlooked some big ticket reform measures by the government, as the union cabinet approved 10% stake sale in Coal India, initial public offer of Cochin Shipyards, approved 3% interest subsidy for exports, while empowered roads ministry to revive 34 stalled projects by appropriate measure.

Global cues too remained sluggish with European counters making a weak start, retreating back from solid gains made in the previous session, as a new fall in the price of copper caused mining stocks to lose ground. Asian markets ended lower as copper prices tumbled and another bomb scare in Europe and gunfire in the French capital hurt risk appetite, while bets that the Federal Reserve remains on track for a rate hike underpinned the dollar.

Back home, sentiments remained downbeat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 492.45 crore yesterday as per provisional data released by the stock exchanges. Depreciation in Indian rupee too dampened sentiments. The rupee depreciated by 22 paise to 66.25 against the dollar at the Interbank Foreign Exchange at the time of equity markets closing on the back of buying of the US currency by importers.

Selling in metal counter too dampened the sentiments due to fall in commodity prices across the globe. Stocks related to power sector ended lower after losing early gains, with Ministry of Power planning to call bids for two domestic coal-based ultra mega power projects next month and two more by March 2016. On the flip side, shares of aviation companies ended higher, erasing their early morning losses, after Jet Airways, IndiGo and SpiceJet said they would pursue legal steps against Competition Commission of India’s (CCI) order imposing penalties totalling Rs 258 crore on them for anti-competitive practices related to air cargo.

The NSE’s 50-share broadly followed index Nifty tumbled by over hundred points to end below the psychological 7,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and eighty points to finish below its psychological 25,500 mark. Broader markets too witnessed selling pressure and ended the session with a cut of over half a percent. The market breadth remained in favour of decliners, as there were 1045 shares on the gaining side against 1,615 shares on the losing side while 186 shares remain unchanged.

Finally, the BSE Sensex plunged by 381.95 points or 1.48% to 25482.52, while the CNX Nifty declined by 105.75 points or 1.35 % to 7731.80. 

The BSE Sensex touched a high and a low 25890.36 and 25453.32, respectively. The BSE Mid cap index was down by 0.68%, while Small cap index was down by 0.71%.   

The lone gaining sectoral index on the BSE was Consumer Durables up by 0.26%, while IT down by 2.29%, Bankex down by 1.95%, TECK down by 1.81%, Metal down by 1.53% and Realty down by 0.96% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 0.95%, Coal India up by 0.83%, NTPC up by 0.72% and Sun Pharma up by 0.08%. On the flip side, Hindalco down by 5.07%, Infosys down by 3.89%, Tata Steel down by 3.69%, Vedanta down by 3.10% and SBI down by 2.80% were the top losers.

Meanwhile, government is likely to finalise the new policy for auction of oil and gas blocks during the current financial year.  Oil Minister Dharmendra Pradhan has said that he will attempt to make the policy during this financial year only, adding further that the ministry has brought the consultation paper and suggestions will come in by November 30 and the ministry will make the policy after considering all the views and take it to the Cabinet.

The policy proposes to free natural gas pricing as well as replace the controversial Production Sharing Contract (PSC) with simpler revenue-sharing regime for all future field auctions in the backdrop of low gas prices not attracting investors in exploration and production sector.The Oil Ministry has issued a paper on new fiscal and contractual regime for award of hydrocarbon acreages with a view to revive investor interest in oil and gas exploration by simplifying rules. In order to make new bidding round more progressive, transparent and market friendly, the government has brought in this consultation paper.

Global players like BP and domestic companies including RIL as well as state-owned ONGC have been seeking pricing freedom as the current rates make new investments unviable. The government had allowed pricing freedom for the gas produced from 69 small and marginal fields it plans to auction shortly, in September.

Pradhan also made it clear that lower crude prices will not change India's stance on increasing share of renewable sources in its energy mix. He also indicated that as much as 20 GW of output from bio-energy will be achieved against the envisaged 10 GW under the total renewable energy target of 175 GW till 2022.

The CNX Nifty touched a high and low 7843.40 and 7725.05 respectively.

The top gainers on Nifty were Idea Cellular up by 3.40%, Asian Paints up by 1.64%, GAIL India up by 1.60%, BPCL up by 1.22% and Coal India up by 0.50%. On the flip side, Hindalco down by 5.44%, Infosys down by 3.87%, Tata Steel down by 3.77%, PNB down by 3.73% and Vedanta down by 3.20% were the top losers.

European Markets were trading mostly in the red; France’s CAC was down by 1.07%, Germany’s DAX was down by 0.70% and UK’s FTSE was down by 0.44%. 

The Asian markets closed mostly lower on Wednesday, as sentiments got affected by fears of fresh terror attacks in Europe. Investors in the region were also wary of the outcome of Bank of Japan’s two-day policy meeting, which started on Wednesday, after previous data indicated negative growth. Japan has slid back into recession as the economy deteriorated more severely than expected in the third quarter. Meanwhile, Chinese President Xi Jinping stated that the fundamentals of China’s economy remain positive, the economy is proving resilient to the pains of deepening reform and there is ample room to fend off downward pressure. Xi added that the world economy was beset with uncertainties with growth continuing to fall short of expectations. Home prices in China rose for first time in over a year in October on an annual basis, signaling a housing market stabilization that could help re-energize the listless economy. Average new home prices rose 0.1 percent in October from a year earlier, reversing September’s 0.9 percent drop, marking the first year-on-year gains since August 2014. In a sign of the weakness in the housing market, month-on-month price gains were recorded in only 27 of the 70 cities tracked by the NBS, down from 39 in September. Thailand GDP rose to a seasonally adjusted 2.9%in the last month compared to 2.8% in the preceding month.