Benchmarks continue to trade in red in late afternoon session

Indian equity benchmarks continued their weak trade in the late afternoon session on account of selling in front line blue chip counters. Sentiments turned down-beat after India reported GDP figures that suggested India's economic growth slowed in the last quarter of 2015, adding to pressure on Prime Minister Narendra Modi's government to expedite stalled reforms in the next session of parliament when it presents its annual budget. According to the Central Statistics Office (CSO), India’s economy grew 7.3% year-over-year in the last quarter and is expected to grow 7.6% for the entire fiscal year. Deprecating rupee against the dollar also influenced the sentiment. Extending its fall for the third consecutive session, the rupee fell by 19 paise to 68.13 against the US dollar due to increased demand for the American unit from importers and banks. Investors failed to draw any solace with the report that consumer sentiments in India rose for the first time in the last four months by 1.2 per cent to 109.8 in January as households have been relatively upbeat about the purchasing environment.

On the global front, European stocks reversed their opening gains to stand lower in late trade. The markets extended sharp losses from the previous session, as concerns persisted over the health of the region's top banks given signs of a global economic slowdown. On Asian trade, Tokyo shares tumbled more than five percent, extending a global sell-off as a stronger yen dented exporters and after oil prices tanked again on fears of a deepening economic slowdown.

Back home, barring Oil & Gas index which gained 0.05%, all the other indices were in the negative, with information technology (IT) and TECK indices being significant losers. Shares of IT companies have declined after Cognizant Technology Solutions said that it expected little or no growth in the three months to March. In scrip specific development, shares of Bharat Forge have surged after the company’s earnings before interest, tax, depreciation and amortization (EBITDA) have seen an expansion of an over 100 basis points (bps) for the quarter ended December 31, 2015 (Q3FY16) on sequential basis. On the other hand, shares of Punjab National Bank have dipped  after reporting a sharp 93% year-on-year (yoy) decline in net profit at Rs 51 crore for the third quarter ended December 31, 2015 (Q3FY16) on account of higher provisioning towards non-performing assets (NPAs). 

The market breadth on BSE was negative, out of 2582 stocks traded, 642 stocks advanced, while 1827 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24005.99, down by 281.43 points or 1.16% after trading in a range of 23919.47 and 24111.19. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.66%, while Small cap index down by 1.44%.

The only gaining sectoral index on the BSE was Oil & Gas up by 0.05%, while IT down by 3.50%, TECK down by 3.05%, Metal down by 2.57%, Auto down by 1.64%, Capital Goods down by 1.43% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.02%, Lupin up by 1.98%, NTPC up by 1.01%, ONGC up by 0.77% and Bajaj Auto up by 0.68%. On the flip side, Tata Motors down by 4.23%, Coal India down by 4.13%, TCS down by 4.10%, Infosys down by 3.62% and SBI down by 2.30% were the top losers.

Meanwhile, with an aim to meet the targets in 2016-17, the government is revamping the disinvestment process, when a tighter budget is expected to leave little room for missing revenues as the Centre has done in the current fiscal. In order to broaden the decision-making process and quickly identify companies for sale, the disinvestment department has roped in the Department of Economic Affairs from the finance ministry and the Department of Public Enterprises who is the nodal agency for all central public sector enterprises. The new disinvestment policy will not be in isolation and only from the view of selling small stake in already listed firms. The government is looking to bring more firms so that they have a ready pipeline.

Besides, the government plans to push profitable subsidiaries of central public sector enterprises to list on the bourses. The government is already pushing firms such as Nalco and Coal India to go for buybacks. The other companies that the government may seek to persuade in this manner include Bharat Heavy Electricals and mining firm NMDC. In this fiscal, the government had kick-started the disinvestment process early with a 5% stake sale in Rural Electrification Corporation in April, followed possible to meet fiscal targets while meeting Seventh Pay Commission obligations

Earlier, Finance Minister Arun Jaitley has said that during the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of Seventh Pay Commission recommendations and One Rank One Pension Scheme. The government is committed to keep the fiscal deficit at 3.5% of the gross domestic production in 2016-17.

Since the beginning of the current fiscal, the government has raised about Rs 13,300 crore from divestment against the target of Rs 69,500 crore, of which Rs 28,500 crore was to come through strategic sale.

The CNX Nifty is currently trading at 7289.60, down by 97.65 points or 1.32% after trading in a range of 7275.15 and 7323.45. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.33%, Lupin up by 1.87%, ONGC up by 1.19%, NTPC up by 1.18% and Bajaj Auto up by 0.48%. On the flip side, PNB down by 5.41%, HCL Tech down by 4.66%, Tech Mahindra down by 4.48%, Tata Motors down by 4.31% and Coal India down by 4.16% were the top losers.

Asian markets were trading in red; Nikkei 225 crumbled 918.86 points or 5.4% to 16,085.44 and Jakarta Composite shed 36.81 points or 0.77% to 4,762.13. 

European markets were trading in red; Germany’s DAX declined by 36.02 points or 0.4% to 8,943.34, France’s CAC decreased 27.4 points or 0.67% to 4,038.91 and UK’s FTSE 100 was down by 4.79 points or 0.08% to 5,684.57