Markets extend previous session losses with gap down opening

With a gap down opening, domestic equity benchmarks have extended their last session losses and are now trading with cut of over half a percent that dragged both the Sensex and Nifty below their psychological 23,300 and 7,100 levels. The session was proving equally weak for broader indices. Weakness in global markets too weighed down the sentiment. Markets were under pressure with Moody's Investors Service’s statement that India's fiscal metrics will remain weaker than its peers in the near term even if Finance Minister Arun Jaitley was to stick to fiscal consolidation roadmap. It said that the government's fiscal deficits have reduced over the last five years, and this has supported the stabilization of government debt ratios. Market participants also remained concerned with report that foreign institutional investors were net sellers in the equities to the tune of Rs 290 crore on Tuesday, as per provisional stock exchange data. Besides, a weakness in Indian rupee against the dollar too weighed on market sentiment. The rupee lost 6 paise to 68.64 against the dollar in early trade at the inter-bank foreign exchange market due to appreciation of the US currency overseas.

In the scrip specific development, NMDC was trading lower by over 10% on the BSE after the stock was quoted ex-dividend for Rs 9.50 per share.

On the global front, the US markets ended lower on Tuesday, as hopes of an oil production cut were dashed, and also the consumer confidence index missed the estimates. Asian markets were trading in red, tracking the weak lead from Wall Street and the fall in crude oil prices after a deal to curb global supplies failed to materialize. Crude oil prices slipped further 1% in Asian trades.

Back home, all the sectoral indices on the BSE were reeling under pressure led by Metal, Bankex, PSU, Capital Goods and Auto. The market breadth on BSE was negative in the ratio of 365: 968, while 68 scrips remained unchanged.

The BSE Sensex is currently trading at 23270.67, down by 139.51 points or 0.60% after trading in a range of 23247.94 and 23338.89. There were just 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.69%, while Small cap index was lower by 0.61%.

The top losing sectoral indices on the BSE were Metal down by 1.93%, Bankex down by 1.34%, PSU down by 1.16%, Capital Goods down by 0.92% and Auto down by 0.76%, while there were no gainers. 

The gainers on the Sensex were Infosys up by 0.81%, Hindustan Unilever up by 0.65%, Bharti Airtel up by 0.58%, Asian Paints up by 0.29% and Maruti Suzuki up by 0.27%. On the flip side, ICICI Bank down by 2.34%, Tata Motors down by 2.04%, ONGC down by 1.98%, NTPC down by 1.90% and BHEL down by 1.83% were the top losers.

Meanwhile, not going in line with the Central Statistics Office' (CSO) ambitious estimates for the economic growth, industry body the Federation of Indian Chambers of Commerce and Industry (FICCI), has said that the Indian economy is expected to grow at 7.4 percent in the current fiscal, slightly lower than 7.6 percent projected in advance estimates of CSO.

The latest Economic Outlook Survey of the Ficci which was conducted during January/February 2016 among economists belonging to the industry, banking and financial services sector, has put across a median GDP growth forecast of 7.4 percent for the current fiscal year, which marks no change from the estimated growth in the previous survey round.According to the survey results, agriculture sector is expected to record a growth of 1.7% in 2015-16, 0.3 percentage points lower than estimated growth in the previous round. Rabi sowing has been low in many areas owing to relatively warm winter this season. Industrial growth is projected to improve to 7.1% in 2015-16, while services sector growth is estimated at 9.7%.

The outlook of the participating economists on inflation remained moderate. The median forecast for Wholesale Price Index based inflation rate for 2015-16 has been put at (-)1.8 percent, with a minimum and maximum range of (-)2.8 percent and (-) 0.4 percent, respectively. The Consumer Price Index based inflation has a median forecast of 5.0% for 2015-16, with a minimum and maximum range of 4.6% and 6.3% respectively.

In the survey, most of the participants agreed that the impact of a slowdown in China, which is the second largest economy, on global growth is inevitable. This is expected to cause some volatility in the system, especially on other emerging markets. However, the economists opined that a repeat of the 2008 crisis was unlikely but one can expect continuing divergence in growth rates of developed and emerging economies.

The CNX Nifty is currently trading at 7058.90, down by 50.65 points or 0.71% after trading in a range of 7058.70 and 7080.15. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.26%, Power Grid Corpn. up by 1.09%, Infosys up by 0.72%,  Hindustan Unilever up by 0.62% and Maruti Suzuki up by 0.33%. On the flip side, PNB down by 3.51%, Cairn India down by 3.25%, Vedanta down by 2.94%, ICICI Bank down by 2.81% and Tata Motors down by 2.35% were the top losers.

Asian markets were trading in red, Hang Seng decreased 311.76 points or 1.61% to 19,103.02, Nikkei 225 decreased 163.6 points or 1.02% to 15,888.45, Taiwan Weighted decreased 36.99 points or 0.44% to 8,297.65, Jakarta Composite decreased 18.49 points or 0.4% to 4,635.56, FTSE Bursa Malaysia KLCI decreased 6.72 points or 0.4% to 1,670.56, Shanghai Composite decreased 6.08 points or 0.21% to 2,897.25 and KOSPI Index decreased 1.23 points or 0.06% to 1,912.99.