Markets make gap-down opening amid weak global cues

Indian equity markets have made gap down opening and are now trading in tight range with a cut of over one percent, tracking weak global cues, in early deals on Monday. Sustained selling in mostly all the key heavyweights dragged Sensex and Nifty below their crucial 24,650 and 7,550 mark respectively. The session was proving equally weak for broader indices. The sentiments were distrustful with a private report stating that consumer sentiments in India fell for the fourth consecutive month in December to the lowest on record, as consumers reported a further deterioration in their personal finances amid rising inflation. Also, the Commerce and Industry Minister Nirmala Sitharaman has said the devaluation of the Chinese currency is a 'worrying' development which will make Indian exports expensive and widen the trade deficit with the neighbouring nation. Besides, the sentiments were too under pressure on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1236.95 crore on Friday, as per provisional data released by the stock exchanges. Meanwhile, the rupee was trading lower by 29 paise at 66.92 against the American currency today at the Interbank Foreign Exchange market as the dollar strengthened overseas.

In the scrip specific development, Sintex Industries tumbled over 7 per cent after the company’s net profit grew 11 per cent year-on-year to Rs 180 crore in the December quarter amid weakness in revenues from affordable housing and EPC contracts. On the hand, Vakrangee surged over 4 per cent after the company announced a strategic tieup with Mahindra e-market for promoting and booking of automobile products through Vakrangee Kendras.

On the global front, the US markets ended lower on Friday, ending the year's first trading week with sharp losses as concerns about China and global economic slowdown persisted. Asian markets were trading in red on Monday with the weak commodity prices and worries about the Chinese economy sapping investors' risk appetite. Emerging-markets currencies also saw volatility, with the South African rand tumbling 9 percent before stemming its slide.

Back home, all the sectoral indices on the BSE were trading in red led by Metal, Realty, Capital Goods down, PSU and Bankex. The market breadth on BSE was negative in the ratio of 436: 1491 while 75 scrips remained unchanged.

The BSE Sensex is currently trading at 24629.56, down by 304.77 points or 1.22% after trading in a range of 24598.90 and 24787.11. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.40%, while Small cap index down by 1.39%.

The losing sectoral indices on the BSE were Metal down by 2.70%, Realty down by 1.93%, Capital Goods down by 1.70%, PSU down by 1.69% and Bankex down by 1.66%, while there were no gainers. 

The only gainers on the Sensex were NTPC up by 0.93% and Infosys up by 0.13%. On the flip side, Tata Steel down by 3.17%, BHEL down by 3.09%, Mahindra & Mahindra down by 2.91%, SBI down by 2.68% and Coal India down by 2.57% were the top losers.

Meanwhile, in order to increase investment and growth, Finance Minister Arun Jaitley has said that the government will continue the reforms, with 'single-minded focus', which it failed to pursue in the recent months. He further said that “India cannot afford a change in direction and in these circumstances every state has to contribute”. With a view to attract investors, Jaitley also called upon states to improve ease of doing business stating they are 'smart people' and look for 'stability of policy (and) business friendly ecosystem.'

Among major reforms, the government has not been able to push the Goods and Services Tax ( GST) bill, which got stuck in Rajya Sabha because of stiff opposition from the Congress. While talking about the need to accelerate reforms at all levels in order to push growth, Jaitley said that world was going through an extremely difficult and challenging time and difficulties have spilled over into Indian system also.

Talking about the World Bank lowering global growth forecast to 2.9 per cent, Jaitley said that growth rates of economies across the world are hovering around extremely low figures and because of the integrated economy, what happens in China, what happens in oil prices, impact India’s markets. He also said that the country’s revenue gets impacted when the price regimes are low because nominal GDP gets reduced.

However, Jaitley took comfort from the fact that even under the trying circumstances, 'India continues to remain the fastest growing economy in the world. So India’s 7-7.5 per cent growth rate stands out amongst the larger economies as bright spot among global economy.'

The CNX Nifty is currently trading at 7500.70, down by 100.65 points or 1.32% after trading in a range of 7494.35 and 7528.40. There were 2 stocks advancing against 48 stocks declining on the index.

The only gainers on Nifty were NTPC up by 1.07% and Infosys up by 0.08%. On the flip side, Vedanta down by 3.82%, Bank Of Baroda down by 3.63%, Tata Steel down by 3.15%, BHEL down by 3.06% and Mahindra & Mahindra down by 3.05% were the top losers.

Asian markets were trading in red; Hang Seng decreased 541.98 points or 2.65% to 19,911.73, Taiwan Weighted decreased 111.96 points or 1.42% to 7,782.01, Shanghai Composite decreased 76.46 points or 2.4% to 3,109.95, Jakarta Composite decreased 73.35 points or 1.61% to 4,472.93, KOSPI Index decreased 13.57 points or 0.71% to 1,904.05 and FTSE Bursa Malaysia KLCI decreased 11.53 points or 0.7% to 1,646.08.