Benchmarks extend losses; Nifty slips below 7,200 mark

Indian equity benchmarks extended its downward journey in the late afternoon session on account of selling in frontline counters as the sentiments remained depressed on persistent global headwinds. The weakness in the rupee against the American currency too weighed on the sentiment. Economic Affairs Secretary Shaktikanta Das meanwhile stated that the fall in domestic equities is due to turmoil in global economy and the government is taking measures to address the challenges. Traders were seen selling Realty, Bankex and PSU sector stocks. In scrip specific development, state-run lenders Central Bank of India, Dena Bank and Allahabad Bank slipped lower on reporting massive losses on Tuesday, while Punjab National Bank continued its downfall as the growing pile of stressed loans took a toll on their health, raising concerns over the precarious state of the financial sector.

On the global front, the Asian markets were trading in red while the European markets were trading mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,200 and 23,700 levels respectively. The market breadth on BSE was negative in the ratio of 460:2025 while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 23696.65, down by 324.33 points or 1.35% after trading in a range of 23636.72 and 23938.32. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.44%, while Small cap index down by 1.86%.

The losing sectoral indices on the BSE were Realty down by 3.92%, Bankex down by 2.49%, PSU down by 2.18%, Metal down by 1.77%, Auto down by 1.43%.

The top gainers on the Sensex were Infosys up by 0.50%, Mahindra & Mahindra up by 0.42% and Reliance Industries up by 0.04%.

On the flip side, Tata Motors down by 5.65%, Adani Ports & Special Economic Zone down by 4.62%, SBI down by 3.89%, Dr. Reddys Lab down by 3.86% and Axis Bank down by 3.10% were the top losers.

Meanwhile, amid increasing global headwinds, Crisil Research in its report has said that Indian economy is expected to grow at 7.9 per cent in the fiscal year 2016-17, lower than earlier forecast of 8.1 per cent and higher from 7.6 per cent expected in the current fiscal, if supported by a normal monsoon. According to the report, growth in the next fiscal will find mild support from improved transmission of the RBI's policy rate cuts and the implementation of the salary and pension revisions recommended by the One Rank One Pension Scheme and the Seventh Pay Commission.

The report further highlighted that the economy's modest recovery so far has been shaped by good luck on crude oil and commodities, and a supportive policy environment. While this is expected to continue, India cannot afford to be third-time unlucky with rains and added that a normal monsoon in fiscal 2017 will give agriculture a one-time growth kicker because of the low-base effect of the last two years.

Crisil further notified that while a slowing world implies prices of crude oil and the commodity complex will remain battered, which will bolster the fiscal math, sluggishness in global demand will prolong the agony for exporters. That means the trigger for growth in fiscal 2017 will come from within  or the domestic economy  and, as in the current fiscal, another dose of good luck through low crude oil prices will be useful.

The report further stated that it also expects the government to improve ease of doing business even more and pass the important reforms such as the Goods and Services Tax (GST), which can improve investor appetite.

The CNX Nifty is currently trading at 7191.85, down by 106.35 points or 1.46% after trading in a range of 7177.75 and 7271.85. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 1.60%, Infosys up by 0.62%, Mahindra & Mahindra up by 0.36%, Power Grid up by 0.21% and Ultratech Cement up by 0.06%.

On the flip side, PNB down by 9.00%, Cairn India down by 6.88%, Hindalco down by 6.36%, Bank of Baroda down by 6.23% and Tata Motors down by 5.89% were the top losers.

Asian markets were trading in red; Nikkei 225 decreased 372.05 points or 2.31% to 15,713.39, Jakarta Composite decreased 40.47 points or 0.85% to 4,728.16 and FTSE Bursa Malaysia KLCI decreased 11.34 points or 0.68% to 1,651.12.

The European markets were trading mostly in green; France’s CAC increased 2.12 points or 0.05% to 3,999.66, Germany’s DAX increased 21.94 points or 0.25% to 8,901.34 and UK’s FTSE 100 decreased 11.44 points or 0.2% to 5,620.75.