Markets make gap down opening amid weak global cues

Markets have made gap down opening and are now trading with cut of around a per cent tracking weakness in Asia and the sharp sell-off in overnight trades in the US. Sustained selling by fund and retail investors dragged both Sensex and Nifty below their psychological 24650 and 7500 levels. Meanwhile, the session was also harrowing for broader indices, which were trading with losses of over 1.40%. Depreciation in Indian rupee against dollar also weighed down sentiments. The rupee weakened by 21 paise to 67.06 against the US dollar in early trade today, at the Interbank Foreign Exchange, amid selling in most Asian currencies, ahead of the domestic WPI inflation readings scheduled for release later in the day. Moreover, foreign portfolio investors (FPIs) sold shares worth a net Rs 75.90 crore yesterday, 13 January 2016, as per provisional data released by the stock exchanges that dampened the markets 

In the scrip specific development, Tata Steel dipped 6% on the BSE after the company said the rating agency Standard & Poor's downgraded the long-term corporate credit rating by a notch to 'BB-' from 'BB', citing weak financial performance and high debt leverage. On the other side, Infosys moved higher by 5% on the NSE, after the company reported a better-than-expected 1.98% quarter on quarter (q-o-q) growth in consolidated net profit at Rs 3,465 crore for the third quarter ended December 31, 2015 (Q3FY16).

On the global front, the US markets slipped on Wednesday, pushing the S&P 500 to close below 1,900 for the first time since September as investors grew anxious about weak energy prices, U.S. corporate earnings and the global economy. Asian markets were trading in red following a massive sell-off on Wall Street overnight, pressured by concerns over a global economic slowdown and low oil prices.

Back home, traders were seen piling up position in IT and TECK, while selling was witnessed in Metal, Capital Goods, Auto, Bankex and Realty. The market breadth on BSE was negative in the ratio of 249: 1658 while 71 scrips remained unchanged.

The BSE Sensex is currently trading at 24627.32, down by 226.79 points or 0.91% after trading in a range of 24473.22 and 24651.30. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.44%, while Small cap index down by 1.73%.

The gaining sectoral indices on the BSE were IT up by 1.73% and TECK up by 1.15%, while Metal down by 2.40%, Capital Goods down by 2.38%, Auto down by 1.91%, Bankex down by 1.86% and Realty down by 1.86% were the losing indices on BSE.

The only gainer on the Sensex was Infosys up by 4.02%. On the flip side, Tata Steel down by 4.72%, Tata Motors down by 3.69%, Axis Bank down by 2.79%, Larsen & Toubro down by 2.70% and Mahindra & Mahindra down by 2.57% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that India has a promising economic outlook as it has emerged among the few large economies in the world. He further said that the economic growth is moving in the right direction and is expected to pick up the momentum in the coming quarters, once the impact of the on-going structural reforms takes firm root.

India has achieved macro stability to large extent but the growth moderation in the global economy and policy uncertainties among advanced countries pose risk to this outlook, Jaitley said during his opening remarks at 14th Financial Stability and Development Council (FSDC) meeting with the financial sector regulators. FSDC Meeting was being held as part of the finance minister's pre-budget consultative process. Earlier, the Chief Economic Adviser, Arvind Subramanian made a presentation on the state of economy. The Council reviewed the major issues and challenges facing the economy. Following this, the Regulators had offered their suggestions/ proposals for the upcoming Budget 2016-17, which were deliberated upon by the Council.

Many suggestions made during the aforesaid meeting with regard to the forthcoming Union Budget 2016-17 include continuing to follow-up path of fiscal consolidation along with quality spending of the public investment in order to achieve the higher rate of growth. Besides, the other suggestions include sufficient provision of funds in the forthcoming budget for recapitalization of banks in order to clean-up their balance sheets and exemption from service tax to life insurance premium. Furthermore, other suggestions include continuation of the Government’s contribution in the premium for Atal Pension Yojana (APY) for another year and exemption from tax at time of final withdrawal under NPS at par with PPF and EPF among others.

The CNX Nifty is currently trading at 7480.35, down by 82.05 points or 1.08% after trading in a range of 7443.80 and 7492.95. There were 2 stocks advancing against 48 stocks declining on the index.

The only gainers on Nifty were Infosys up by 4.12% and Tech Mahindra up by 0.21%. On the flip side, Tata Steel down by 5.25%, Tata Motors down by 3.77%, Axis Bank down by 3.11%, PNB down by 3.11% and BHEL down by 3.04% were the top losers.

Asian markets were trading in red; Nikkei 225 decreased 647.55 points or 3.66% to 17,068.08, Hang Seng decreased 315.14 points or 1.58% to 19,619.74, Taiwan Weighted decreased 106.84 points or 1.37% to 7,717.77, Shanghai Composite decreased 32.08 points or 1.09% to 2,917.52, KOSPI Index decreased 26.63 points or 1.39% to 1,889.65 Jakarta Composite decreased 20.31 points or 0.45% to 4,516.87 and FTSE Bursa Malaysia KLCI decreased 6.93 points or 0.42% to 1,635.61.