Benchmarks continue to trade in red; Sensex below 24300 mark

After getting gap down opening, Indian benchmark indices continued to trade in negative territory in later morning session on account of sustained capital outflows amid global sell-off on renewed concerns over slowing growth after oil prices again cracked $30 a barrel.  Depreciation in Indian rupee too dampened sentiments. The rupee again broke below the 68-mark by depreciating 28 paise to trade at 68.26 against the dollar in early trade due to increased demand for the American unit from importers and banks. Moreover, investors failed to get any sense of relief from the report that activity in India's services sector increased at its fastest pace in over a year and a half in January as demand accelerated, allowing firms to build up a much bigger backlog of orders. The Nikkei/Markit Services Purchasing Managers' Index rose to 54.3 in January from 53.6 in December, the seventh straight month above the 50-level that distinguishes growth from contraction. On the global front, Asian market trading mostly in red as oil prices dropped for a third day, prompting investors to seek shelter in safe-haven assets and lifting bonds and gold to multi-month highs. Further, Japan’s Nikkei lost 3.4 per cent, wiping out almost all of its gains made after the Bank of Japan had announced the introduction of negative interest rates on Friday. Meanwhile, US stocks ended around two percent lower on Tuesday as disappointing earnings from global oil majors Exxon and British Petroleum after plunge in global crude oil prices. 

Back on street, all sectoral indices on the BSE were in the red with Power index emerging as the top loser down by over four percent followed by Capital Goods and PSU indices among others. Furthermore, shares of oil exploration and production (E&P) firms edged lower after sharp decline in crude oil prices, while metal shares are battered in the early morning trades on falling commodity prices. In scrip specific development, shares of Crompton Greaves have cracked around 24 percent after the company posted a consolidated net loss of Rs 107 crore for the quarter ended December 31, 2015 compared to a net profit of Rs 274.29 crore for the corresponding quarter in the previous year. On the other hand, Shares of Vakrangee have gained after the company’s Corporate Agency has tied up with Tata AIG General Insurance Company, a joint venture between Tata Group and American International Group (AIG).

The market breadth on BSE was negative, out of 2516 stocks traded, 530 stocks advanced, while 1902 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24274.98, down by 264.02 points or 1.08% after trading in a range of 24246.94 and 24393.77. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.61%, while Small cap index down by 2.01%.

The top losing sectoral indices on the BSE were Power down by 4.09%, Capital Goods down by 3.48%, PSU down by 1.85%, Bankex down by 1.58% and Oil & Gas down by 1.54%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were Hindustan Unilever up by 2.44%, Sun Pharma Inds. up by 0.68%, Bajaj Auto up by 0.67%, Hero MotoCorp up by 0.33% and Cipla up by 0.09%. On the flip side, BHEL down by 4.34%, Tata Motors down by 2.94%, SBI down by 2.74%, ICICI Bank down by 2.45% and ONGC down by 2.28% were the top losers.

Meanwhile, the Engineering Export Promotion Council (EEPC) of India in its meeting with Commerce and Industry Minister Nirmala Sitharaman has urged the government to look into the issue of a sharp fall in engineering exports. EEPC in the meeting to discuss reasons for the decline in exports and ways to promote India's exports, has said that the promotional schemes for external trade must be put back in place immediately in the wake of worsening conditions in the global market.

EEPC further said that the move to impose the minimum import price on steel has created considerable uncertainty in the market and is bad for engineering exports and one of the reasons for the sharp decline in December 2015, which is to be addressed on the immediate basis. Giving various suggestion EEPC chairman TS Bhasin said that a new scheme should be announced where the benefits mount up for all tariff lines and for all countries by keeping the MEIS (Merchandise Exports from India Scheme) aside. This will lower transaction costs as the need for landing certificates or any other alternatives will not be necessary. Or else the government should increase the MEIS benefit, extending them to Category C countries.

The other issues raised by EEPC included demand for a technology upgradation fund to help the MSME sector catch up with the latest knowhow. EEPC said that the country must have FTAs (free trade agreements) with some of the  countries like CIS, Africa and Latin America and regions and develop greater relations and diversify exports to these countries and have own warehouses in Latin America, so that India can lower the delivery times.

The CNX Nifty is currently trading at 7376.05, down by 79.50 points or 1.07% after trading in a range of 7362.65 and 7406.10. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.36%, Zee Entertainment up by 2.04%, Sun Pharma Inds. up by 0.69%, Hero MotoCorp up by 0.56% and Bajaj Auto up by 0.54%. On the flip side, BHEL down by 4.38%, Tata Power down by 3.57%, Cairn India down by 3.30%, Idea Cellular down by 3.27% and Vedanta down by 3.16% were the top losers.

Asian markets were trading in red, Nikkei 225 was down by 3.13%, Hang Seng down by 2.49%, Taiwan Weighted down by 0.59%, Jakarta Composite down by 0.43%, Shanghai Composite down by 1.17%, KOSPI Index down by 0.81% and FTSE Bursa Malaysia KLCI was down by 0.85%.