Markets show no respite, Sensex slips below 24000 mark

There is no respite for the Indian markets and they continue to grapple in deep red in early noon session, with both the benchmarks down by around 2 percent. Sensex even momentarily breached the 24000 mark, first time since May 2014. The mayhem on the Dalal Street is mainly induced by the global sell-off on concern of declining economic growth after the International Monetary Fund (IMF) cut its global growth forecasts for the third time in less than a year. However, the IMF retained growth estimates for India, saying that the Indian economy is expected to grow by 7.3% in the current financial year and 7.5% in 2016-17. Metal, Banks and oil & gas shares have led the selloff in markets, with hardly any corner showing any resistance. Meanwhile, the rupee weakness too continued weighing down the sentiments, which has turned to its weakest level since August 2013. Aviation stocks that defied the market wide sell-off and entered in green for some time on report that domestic passenger traffic rose 20.34 per cent in December last year over the same period in 2014 on account of the on-going tourists season, too have given up their gains and are trading in red.

The BSE Sensex is currently trading at 24049.89, down by 429.95 points or 1.76% after trading in a range of 23998.65 and 24325.77. There were just 2 stocks advancing against 27 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in tandem with the benchmarks; the BSE Mid cap index slumped by 2.12%, while Small cap index was down by 1.94%.

The top losing sectoral indices on the BSE were Metal down by 3.56%, Power down by 2.82%, Realty down by 2.78%, PSU down by 2.73%, Capital Goods down by 2.54%.

The gainers on the Sensex were Asian Paints up by 0.35% and Wipro up by 0.17%. On the flip side, Adani Ports & SEZ down by 5.14%, BHEL down by 4.61%, Coal India down by 4.29%, SBI down by 4.04% and Tata Motors down by 3.56% were the top losers.

Meanwhile, in its Budget proposal to the Finance Ministry, the Commerce Ministry has suggested for exemption or lowering of Dividend Distribution Tax (DDT) and Minimum Alternate Tax (MAT) on units and developers, as it was the biggest discouragement for investors who had been promised a tax holiday for the initial years of operation. The ministry said to lower MAT to at least 7.5 per cent from18.5 percent at present, so that exporters from SEZs are able to set off those advance tax MAT paid within the stipulated period and also as the government gets some revenue.

Commerce ministry has urged the finance ministry to permit Special Economic Zones (SEZs) units to sell in the domestic market by paying concessional import duties in line with what is paid by India’s Free Trade Agreement (FTA) partners. It has said this as it is concerned about the steady rise in de-notification of SEZs and increased delay in implementation of projects. The Commerce Ministry’s argument is that with fall in global demand and uncertainty gripping major economies, SEZ units should not be deprived from accessing the domestic market.

Meanwhile, Commerce Ministry has also made proposal to lowering of customs duties to be paid by SEZ units when they sell their goods in the domestic market by bringing it in line with the best rates offered to the country’s FTA partners.

Currently, there are 204 operational SEZs in the country with a total investment of Rs3, 63,112.46 crore and providing employment for 15, 44,526. In 2013-14, exports from SEZs was at $82.35 billion 8 per cent lower than the year before. 

The CNX Nifty is currently trading at 7304.40, down by 130.70 points or 1.76% after trading in a range of 7287.15 and 7470.90. There were just 4 stocks advancing against 46 stocks declining on the index.

The gainers on Nifty were Asian Paints up by 0.47%, HCL Tech. up by 0.27%, Wipro up by 0.18% and Sun Pharma Inds. up by 0.04%. On the flip side, Vedanta down by 6.86%, Adani Ports & SEZ down by 5.33%, Cairn India down by 5.01%, BHEL down by 4.57% and Yes Bank down by 4.34% were the top losers.

The Asian markets were trading in red, Hang Seng plunged by 731.28 points or 3.72% to 18,904.53, Nikkei 225 declined by 632.18 points or 3.71% to 16,416.19, Taiwan Weighted was lower by 155.76 points or 1.98% to 7,699.12, KOSPI Index declined by 44.19 points or 2.34% to 1,845.45, Shanghai Composite was down by 31.2 points or 1.04% to 2,976.54, Jakarta Composite decreased by 13.33 points or 0.3% to 4,478.40 and FTSE Bursa Malaysia KLCI was lower by 7.65 points or 0.47% to 1,621.57.