Markets make gap-down opening amid weak global cues

After a mildly positive close in previous session, Indian equity markets have made a gap-down opening and are now trading with a cut of around half a percent in early deals on Monday, taking weak cues from Asian counterparts. Sustained selling in most of the key heavyweights dragged BSE’s -- Sensex -- and NSE’s -- Nifty -- to trade below their crucial 26,100 and 7,950 mark respectively. Further, the sentiments were under pressure with former Finance Minister P Chidambaram stating that the government has not been able to fulfill its promises. He also argued that since the GDP growth for 2015-16 is not likely to be higher than 7% to 7.3%, the economy is stuck in a groove. Besides, the sentiments were weighed down by Indian rupee depreciating by 21 paise at 66.35 against the dollar in early trade today at the Interbank Foreign Exchange (forex) market on account of increased demand for the US currency from importers and jump in global crude prices as tensions flared up between Iran and Saudi Arabia. However, the session was productive for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.30-0.40%.

In the scrip specific development, IRB Infrastructure Developers rallied 8% at Rs 265 on the Bombay Stock Exchange after the company won the biggest National Highway Project in India in terms of project cost estimated at Rs 10,050 crore.

On the global front, Asian markets were mostly trading in red on Monday, the first trading day of 2016, with the weak cues from Wall Street last Thursday and geopolitical tensions in the Middle East weighing on investor sentiment. In addition, a private survey showed that China's factory activity contracted for a tenth straight month in December.

Back home, traders were seen pilling up position in Realty, Power, Consumer Durables, PSU and Auto, while selling was witnessed in Bankex, TECK, FMCG, Metal and IT. The market breadth on BSE was positive in the ratio of 1438: 581 while 90 scrips remained unchanged.

The BSE Sensex is currently trading at 26057.03, down by 103.87 points or 0.40% after trading in a range of 25970.65 and 26116.52. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Realty up by 0.98%, Power up by 0.85%, Consumer Durables up by 0.39%, PSU up by 0.09% and Auto up by 0.07%, while Bankex down by 0.63%, TECK down by 0.22%, FMCG down by 0.14%, Metal down by 0.12% and IT down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 0.97%, GAIL India up by 0.72%, Wipro up by 0.65%, Hindustan Unilever up by 0.64% and ONGC up by 0.58%. On the flip side, Bharti Airtel down by 1.57%, Tata Motors down by 1.18%, ICICI Bank down by 0.93%, Hero MotoCorp down by 0.92% and HDFC down by 0.91% were the top losers.

Meanwhile, the government will unveil direct benefit transfer (DBT) scheme for kerosene, from 1st April 2016, where the users will buy the cooking fuel at market rate but will get financial support directly in their bank accounts. The scheme will be implemented in selected 26 districts of eight states. This step has come after the success of paying subsidy to LPG users in their bank accounts. The move will help curtail subsidy outgo for kerosene, which in 2014-15 was about Rs 24,799 crore.

Under the scheme, the cash subsidy to be paid to users will be equivalent to the difference between current PDS price of about Rs 12 and market rate of Rs 43 per litre. The scheme will be rolled out from April 1 in Raipur, Durg and Bilaspur in Chhattisgarh, Panipat and Panchkula in Haryana, Shimla, Solan and Una in Himachal Pradesh, Chhatra, Giridih, East Singbhum, Hazaribagh, Jamtara and Khunti in Jharkhand, Hoshangabad, Harda, Khandwa and Burhanpur in Madhya Pradesh, Amaravati and Latur in Maharashtra, Taran, Pathankot and Mohali in Punjab and Pali, Jhunjhunu and Kota in Rajasthan.

With a view to incentivize States and Union Territories to implement DBT in kerosene, it has been decided that the states be given cash incentive of 75 percent of subsidy savings during the first two years, 50 percent in the third year and 25 percent in the fourth year. In order to avoid any inconvience to the beneficiary through the payment of un-subsidised price, subsidy shall be credited to eligible beneficiaries in advance during the initial purchase.

The CNX Nifty is currently trading at 7918.75, down by 44.45 points or 0.56% after trading in a range of 7902.55 and 7924.55. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 2.38%, Power Grid Corp up by 0.99%, NTPC up by 0.83%, Bajaj Auto up by 0.65% and GAIL India up by 0.61%. On the flip side, Idea Cellular down by 2.06%, Bharti Airtel down by 1.60%, Tata Motors down by 1.29%, HDFC down by 1.19% and Kotak Mahindra Bank down by 1.07% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 508.86 points or 2.32% to 21,405.54, Nikkei 225 decreased 500.76 points or 2.63% to 18,532.95, Taiwan Weighted decreased 178.19 points or 2.14% to 8,159.87, Shanghai Composite decreased 139.27 points or 3.94% to 3,399.91, KOSPI Index decreased 29.32 points or 1.49% to 1,931.99 and FTSE Bursa Malaysia KLCI decreased 20.91 points or 1.24% to 1,671.60. On the flip side, Jakarta Composite increased by 0.22 points or 0% to 4,593.22.