Late hour sell-off drags benchmarks lower; Nifty slips below 7,450 mark

The bloodbath in Indian stock markets prolonged for yet another session as the benchmarks continued to sway to the tune of depressing global developments and deposed another over a percentage point on the last trading session of the week. Investors squared off position in the dying hours of trade as sentiments turned pessimistic on concerns over bearish global markets, coupled with disappointing macro-data and caution over the third quarter results. Sentiments remained subdued on report that United Nations has downgraded its GDP growth forecast for India for 2016 to 7.5 per cent from 8.2 per cent estimated earlier, largely due to slow progress in implementing reform policies. Meanwhile, SEBI Chairman UK Sinha said the Chinese slowdown concerns have posed a new challenge for India and raised uncertainty over the country's growth. Depreciation in Indian rupee too weighed on sentiments. The rupee surrendered its initial gains and was trading down by 37 paise to 67.66 against the US dollar at the time of equity markets closing on bouts of dollar demand from importers. Investors failed to draw any sense of relief with Finance Minister Arun Jaitley’s statement that India has emerged among the few large economies in the world with a promising economic outlook. He also added that Economic growth is moving in the right direction and its pace is expected to gather momentum in the coming quarters, once the impact of the on-going economic and structural reforms takes the firm root.

On the global front, Asian stock markets ended mostly in red, erasing early gains despite a positive finish from Wall Street overnight. Chinese shares led the region's losses with the mainland's benchmark Shanghai Composite index closing down 3.55 percent as renewed concerns about the world's second-largest economy. The price of oil fell again, hovering slightly above $30 per barrel. Furthermore, all key benchmark indices in Europe were trading in the negative region with CAC 40 being the biggest laggard in the space after shedding over one a percent point. 

Back home, the bourses commenced the day in positive territory as optimistic global cues supported investor sentiments. However, the frontline indices could not capitalize on to the early gains and drifted into the red in very early trade. Thereafter, the indices remained choppy through the session, but the sell-off in the dying hour of trade led the indices to lowest part of the session. Finally, the NSE’s 50-share broadly followed index Nifty, suffered a nasty ninety nine point laceration to settle below the crucial 7,450 support level while Bombay Stock Exchange’s Sensitive Index Sensex got obliterated by over three hundred points and closed just above the psychological 24,450 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with large cut of over two percent. On the sectoral front, the high beta sectors like Realty, Power and PSU witnessed brutal assaults as they got clobbered by 4.20%, 3.88% and 2.84% respectively. While counters like Banking and Capital Goods too suffered severe pounding. However, information technology pocket showed some resilience for most part of the session and attracted buying interests, but finally give up most of its strength and settled with marginal gains. The market breadth remained awful as there were 403 shares on the gaining side against 2284 shares on the losing side while 144 shares remained unchanged.

Finally, the BSE Sensex declined by 317.93 points or 1.28% to 24455.04, while the CNX Nifty lost 99 points or 1.31% to 7,437.80.

The BSE Sensex traded in a range of 24912.64 and 24421.53. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices made a negative closing; the BSE Mid cap index ended down by 2.68%, while Small cap index ended down by 3.13%.

The only gaining sectoral index on the BSE was IT up by 0.07%, while Realty down by 4.20%, Power down by 3.88%, PSU down by 2.84%, Capital Goods down by 2.82% and Bankex down by 2.72% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.13%, Infosys up by 1.02%, Dr. Reddys Lab up by 0.74%, Maruti Suzuki up by 0.56% and Hero MotoCorp up by 0.28%. On the flip side, GAIL India down by 6.01%, SBI down by 5.64%, BHEL down by 5.08%, NTPC down by 4.58% and ICICI Bank down by 4.57% were the top losers.

Meanwhile, in order to address concerns over the entry of sub standard items and to simplify the process by setting shelf-life norms and relaxing the labeling guidelines, India’s food regulator Food Safety and Standards Authority of India (FSSAI) has issued new rules for importing products. These regulations may be called as Food Safety and Standards (Import) Regulations, 2016.

The regulator addressed two key issues raised by the food industry by easing labelling requirements and introducing a redressal procedure. According to the authority, the new regulations - except the packaging and labelling requirements and will also apply to export consignments from India that are rejected by foreign countries and returned.

As per the new norms, the companies must register with the Directorate General of Foreign Trade and possess a valid import-export code, apart from an FBO licence to import food. Besides, it has allowed the importers to affix a single, non-detachable sticker to rectify labelling errors related to the name and address of the importer, the FSSAI logo and licence number and the symbols for nonvegetarian and vegetarian food items. The earlier rules didn't allow such errors to be corrected. 

Further, no person shall import any food without an import license from the Central Licensing Authority in accordance with the procedure laid down in the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011. No food article will be allowed unless it has 60% of its shelf life remaining when it is cleared from customs, according to the new rules.

The CNX Nifty traded in a range of 7,566.50 and 7,427.30. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.33%, Tech Mahindra up by 1.75%, HCL Tech up by 1.36%, Reliance Industries up by 1.03% and Dr. Reddys Lab up by 0.79%. On the flip side, Vedanta down by 8.32%, SBI down by 6.50%, Cairn India down by 6.24%, PNB down by 6.19% and GAIL India down by 5.75% were the top losers.

European markets were trading lower; Germany’s DAX decreased 75.63 points or 0.77% to 9,718.57, UK’s FTSE 100 declined 52.16 points or 0.88% to 5,866.07 and France’s CAC was down by 45.61 points or 1.06% to 4,267.28.

Asian equity markets ended mostly in red on Friday after continued falls in the price of oil and poor Chinese bank lending figures undermined confidence. Chinese shares ended deep in the red after another late afternoon sell-off. While foreign direct investment into China accelerated in 2015, driven by strong expansion in investment into the service sector, new yuan loans extended by Chinese banks fell to 597.8 billion yuan ($90.76 billion) in December from 708.9 billion in November, adding to the gloom surrounding the world's second-largest economy. But, offering some stability to the Chinese market, the People's Bank of China (PBOC) set the yuan mid-point fix at 6.5637, comparatively flat in relation to Thursday's fix of 6.5616. Japanese stocks ended down in choppy trade, giving up early gains as oil prices turned lower in Asian deals and Bank of Japan Governor Haruhiko Kuroda said he isn't considering additional easing at the moment, blaming tumbling global oil prices for the sluggish price trend. Hong Kong shares closed at its lowest level in nearly 3-1/2 years, pounded by tumbling mainland stocks and a drop of the Hong Kong dollar against the US dollar.