Market extend losses; Sensex breaches 24,500 mark

Indian equity benchmarks have magnified their losses and are trading near day’s low weighed down by IT, FMCG and financial shares in noon deals. Traders remained on sidelines ahead of Index of Industrial Production (IIP) data for January slated to be released tomorrow. Market participants failed to get any sense of relief with Prime Minister Narendra Modi making a fresh pitch for passage of GST and other legislations in the Rajya Sabha, considering the 'conducive atmosphere' that has been prevailing in Parliament this session with cooperation from the opposition.

On the global front, Asian markets were trading mostly in green at this point of time after New Zealand surprised markets with a rate cut, keeping investors primed for more stimulus from the European Central Bank later in the day as global policy makers step up efforts to support their wobbly economies. However, Chinese benchmarks edged lower with government data showing exports fell by more than expected in February. Exports dropped sharply, falling by 25.4% from a year earlier, while imports slid 13.8%.

Closer home, upstream oil companies edged higher in the trade with Union Cabinet clearing new Hydrocarbon Exploration & Licencing Policy. The new policy contains several norms that will smooth the process of licencing to exploration, by steps such as offering a uniform licence for all fuels such as natural gas, crude oil or shale, and by streamlining revenue and production sharing models. Shares of metal companies edged higher as the Union Cabinet has cleared amendments to the MMDR Act. The move would allow transfer of mining lease for captive mines, as compared to the present scenario where transfer of mining lease is only for auctioned mines.

The BSE Sensex is currently trading at 24498.62, down by 295.34 points or 1.19% after trading in a range of 24497.26 and 24817.48. There were 5 stocks advancing against 24 stocks declining on the index.

The broader indices were exhibiting mixed trend; the BSE Mid cap index was down by 0.13%, while Small cap index up by 0.04%.

The few gaining sectoral indices on the BSE were Metal up by 0.73%, Consumer Durables up by 0.56% and Basic Materials was up by 0.29%, while Energy down by 1.52%, IT down by 1.47%, Capital Goods down by 1.47%, TECK down by 1.39% and FMCG down by 1.17%, were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.33%, Maruti Suzuki up by 1.21%, NTPC up by 0.95%, ONGC up by 0.44% and Coal India up by 0.31%. On the flip side, BHEL down by 3.25%, Infosys down by 2.66%, Reliance Industries down by 2.47%, Larsen & Toubro down by 1.79% and ITC down by 1.52% were the top losers.

Meanwhile, Finance Minister Arun Jaitley may have been forced to withdraw the proposal of taxation of Employee Provident Fund (EPF), but the government has not given up on the goal of creating a pensioned society. The government is now considering a proposal to make mandatory for employers to route most of their share toward the retirement savings of employees into the Employee Pension Scheme (EPS) rather than EPF for employees above the salary threshold of Rs 15,000 per month.

This proposal was discussed at a high level meeting in the Prime Minister's Office (PMO) last week. Government does not want to go wrong this time and would ensure that there is extensive consultation with all stakeholders on the proposal. Changing the rule on the employer's contribution would mean that a substantial portion of this would go toward a pension for the employee, rather than getting withdrawn at one shot from the EPF at retirement. Further it will maintain uniformity between EPF and the General Provident Fund as the former will continue to enjoy exempt-exempt-exempt (EEE) status at the stages of investment, accumulation and payout.

Employer of a private sector matches contributions made by an employee to EPF -- 12% of basic salary by each. While all of the employee's contribution goes to EPF, 8.33% of the employer's payment goes to EPS subject to a maximum of Rs 1,250 a month. That is 8.33% of Rs 15,000, the statutory limit for contributions. These and other EPS conditions may change if the proposal is implemented wherein those earning more than Rs 15,000 a month will see a higher share of the employer's contribution going to EPS.

The CNX Nifty is currently trading at 7463.25, down by 68.55 points or 0.91% after trading in a range of 7455.20 and 7547.10. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 3.36%, Hindalco up by 2.84%, Tech Mahindra up by 1.26%, Cipla up by 1.07% and Maruti Suzuki up by 0.96%. On the flip side, BHEL down by 3.16%, Infosys down by 2.91%, Bank of Baroda down by 2.69%, Reliance Industries down by 2.64% and Larsen & Toubro down by 1.88% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 3.67 points or 0.22% to 1,690.02, KOSPI Index increased 16.38 points or 0.84% to 1,969.33, Taiwan Weighted gained 26.59 points or 0.31% to 8,660.70, Hang Seng added 40.15 points or 0.2% to 20,036.41 and Nikkei 225 was up by 210.15 points or 1.26% to 16,852.35.

On the flip side, Jakarta Composite decreased 36.21 points or 0.75% to 4,774.83 and Shanghai Composite was down by 32.43 points or 1.13% to 2,830.12.