Benchmarks extend losses; Metal, Realty drag

Indian equity benchmarks extended their losses in the late afternoon session on account of selling in front line blue chip counters due to the global sell-off concern on declining economic growth after International Monetary Fund (IMF) cut its global growth forecasts for the third time in less than a year. The continuous slide in oil prices has been cited as a big reason for the crack in the markets and crude prices hit new 12-year lows below $28 a barrel following the International Energy Agency’s warning about oversupply in oil markets also added selling pressure across the board. Traders were seen selling in Metal, Realty and Power sector stocks. On the global front, the Asian markets were trading in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,300 and 24,000 levels respectively. The market breadth on BSE was negative in the ratio of 341:2159 while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 23924.34, down by 555.50 points or 2.27% after trading in a range of 23924.33 and 24325.77. 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 2.78%, while Small cap index down by 2.52%.

The losing sectoral indices on the BSE were Metal down by 4.46%, Realty down by 3.76%, Power down by 3.37%, PSU down by 3.28% and Bankex down by 3.18%.

The only gainers on the Sensex were Bajaj Auto up by 0.46% and Wipro up by 0.23%.

On the flip side, SBI down by 5.57%, Adani Ports & Special down by 5.55%, Coal India down by 4.99%, Reliance Industries down by 4.66% and BHEL down by 4.16% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its World Economic Outlook (WEO) update has retained India’s growth projection at 7.3 per cent in the current fiscal and 7.5 per cent for the next year, even as it cut world economic outlook to 3.4 per cent for 2016, stating that India would continue to grow at a robust pace. IMF has also warned that there were important risks to the outlook, which are particularly prominent for emerging market and developing economies and could stall global recovery.

IMF in its update stated that India and the rest of emerging Asia are generally projected to continue growing at a robust pace, with some countries facing strong headwinds from China’s economic rebalancing and global manufacturing weakness. IMF said that the downward revision in global growth was largely accounted for by Brazil, where a recession is proving to be deeper and more protracted than previously expected; the Middle East, where prospects have been hurt by lower oil prices; and the US, where the growth momentum is now expected to hold steady rather than accelerate and a generalised slowdown in emerging market economies. IMF added that if these key challenges are not successfully managed, global growth could be derailed.

IMF further said that China’s growth would slow to 6.3 per cent in 2016 and to 6 per cent in 2017. As for the world growth, IMF forecast 3.4 per cent for 2016 and 3.6 per cent for 2017. Brazil’s economy is now projected to contract by 3.5 per cent in 2016, against the October projection of one per cent contraction. The US economy is expected to grow 2.6 per cent in 2016, against an earlier projection of 2.8 per cent.

IMF in the last WEO update released in October had projected India to grow at 7.3 per cent in the current fiscal and 7.5 per cent in 2016-17. As for world growth, figures were at 3.6 per cent for 2016 and 3.8 per cent for 2017. IMF said the pick-up in global activity is projected to be more gradual than in the October WEO, especially in emerging market and developing economies which accounts for over 70 percent of the global growth.

The CNX Nifty is currently trading at 7263.45, down by 171.65 points or 2.31% after trading in a range of 7260.90 and 7470.90. There were 3 stocks advancing against 47 stocks declining on the index.

The only gainers on Nifty were Bajaj Auto up by 0.42%, Wipro up by 0.18% and HCL Tech up by 0.09%.

On the flip side, Vedanta down by 7.36%, Hindalco down by 6.82%, Yes Bank down by 6.53%, PNB down by 5.95% and Adani Ports & Special down by 5.78% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 749.51 points or 3.82% to 18,886.30, Nikkei 225 decreased 632.18 points or 3.71% to 16,416.19, Taiwan Weighted decreased 155.76 points or 1.98% to 7,699.12, KOSPI Index decreased 44.19 points or 2.34% to 1,845.45, Shanghai Composite decreased 31.04 points or 1.03% to 2,976.69, Jakarta Composite decreased 26.31 points or 0.59% to 4,465.43 and FTSE Bursa Malaysia KLCI decreased 10.1 points or 0.62% to 1,619.12.

The European markets were trading in red; UK’s FTSE 100 decreased 159.43 points or 2.71% to 5,717.37, Germany’s DAX decreased 309.59 points or 3.2% to 9,354.62 and France’s CAC decreased 139.88 points or 3.27% to 4,132.38.