Benchmarks add losses; Nifty slips below 7650 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 400 points and Nifty falling below the 7650 level, weighed down by weakness in Asian peers after China's regulators halted trading for the day following a sharp plunge in Chinese shares. The devaluation of the years rekindled fears of a growth slowdown in the world's second largest economy while slump in crude oil prices also dampened sentiment. US stocks ended lower in overnight trades after the yuan devaluation triggered growth concerns in China. On the domestic front, Investors failed to draw any solace with World Bank’s report that India would remain by far the fastest growing large economy in 2016 even as it scaled down its global growth forecast. In its report titled Global Economic Prospects, the World Bank projected that the Indian economy will grow by 7.8% in 2016 while China will grow by 6.7%.  Furthermore, Finance Minister Arun Jaitley said that in the first half of FY16, the Indian Economy has achieved robust growth rate despite volatility and uncertainty in global economy. Market participants remained cautious with the report that Indian companies raised the lowest amount via both onshore and offshore debt markets in six years last year owing to subdued domestic investment climate and volatile global markets.

Back on street, all sectoral indices on the BSE were in the red with Auto index emerging as the top loser down by over two and half percent followed by Metal and Capital Goods indices among others. In scrip specific development, shares of Tata Motors have declined on concerns that the growth slowdown in China may impact JLR sales. On the other hand, shares of Transwarranty Finance have surged after RBI has allowed foreign institutional investors (FIIs)/registered foreign portfolio investors (RFPIs) and non-resident Indians to invest up to 100% and 24% stake in Transwarranty Finance under the portfolio investment scheme.  The market breadth on BSE was negative, out of 2516 stocks traded, 530 stocks advanced, while 1902 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24993.45, down by 412.88 points or 1.63% after trading in a range of 24991.96 and 25230.35. All the 30 stocks on the Sensex were on declined side.

The broader indices were trading in red; the BSE Mid cap index was down by 1.84%, while Small cap index down by 2.18%.

The top losing sectoral indices on the BSE were Auto down by 2.86%, Metal down by 2.56%, Capital Goods down by 2.40%, Realty down by 2.39% and PSU down by 2.12%, while there were no gainers on the sectoral front.

The top losers on the Sensex were Tata Motors down by 3.95%, Tata Steel down by 3.95%, Maruti Suzuki down by 3.94%, ONGC down by 3.73% and Mahindra & Mahindra down by 3.61%, while there were no gainers in index.

Meanwhile, concerned over continued decline in exports, the Commerce and Industry Minister will hold a meeting with representatives of states and the industry on January 8, to discuss ways to promote India’s exports. In the meeting the Centre and state governments will deliberate on the relevant infrastructure to promote trade and identify impediments that are affecting exports.  The meeting is scheduled as part of the first meeting of the Council for Trade Development and Promotion, chaired by Commerce and Industry Minister Nirmala Sitharaman. The council was formed last year with an aim to involve states in boosting trade.

The council provides a platform to state governments and UTs for articulating their perspective on trade policy to help them develop and pursue export strategies in line with national foreign trade policy. The other members of the council include Chairman Railway Board, Niti Aayog Secretary and CEO, Director General of Foreign Trade, Director General of FIEO, representati ves of CII and FICCI and concerned Joint Secretary of Department of Commerce. Federation of India Export Organisation (FIEO) which will also participate the meeting has said that it will raise issues related to tax refund in states as large amount of refund is pending with states. Filing of tax is online but refund is not online which are impacting exports. Further, the other issues which will come up include demand for inclusion of certain taxes like entry tax and electricity tax in the GST.

Contracting for the twelve month in a row, India’s exports plunged 24 percent in November to $20 million. The significant fall in exports is attributed to weak global demand, amid a tepid global economic recovery. During April-November this fiscal, the exports contracted by 18.46 per cent year-on-year to $ 174.3 billion.

The CNX Nifty is currently trading at 7613.50, down by 127.50 points or 1.65% after trading in a range of 7612.60 and 7674.95. There were 2 stocks advancing against 48 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 0.43% and Power Grid up by 0.36%. On the flip side, Vedanta down by 6.07%, Cairn India down by 5.19%, ONGC down by 4.29%, Bank of Baroda down by 4.20% and Mahindra & Mahindra down by 4.08% were the top losers.

Asian markets were trading in red; Hang Seng was down by 2.39%, Nikkei 225 down by 1.92%, Taiwan Weighted down by 2.27%, Jakarta Composite down by 1.05%, KOSPI Index down by 0.87% and FTSE Bursa Malaysia KLCI was down by 0.36%.