Markets extend last session losses with gap-down opening

With a gap-down opening Indian equity markets have extended their previous session losses and are trading lower by over quarter a percent in early deals amid feeble global cues, as participants turn cautious ahead of the two-day FOMC meet due to begin later today. Selling witnessed in most of the key heavyweights dragged both the Sensex and Nifty below their crucial 25, 600 and 7,850 levels.  Selling in cigarette shares too weighed down the sentiment. ITC, Godfrey Philips, Golden Tobacco and VST Industries were trading lower by up to 10% on the BSE on reports that the government is working on a proposal to completely ban foreign direct investment (FDI) in the tobacco sector. Further, the Indian rupee depreciating 17 paise to 66.79 against the US Dollar in early trade on Tuesday at the Interbank Foreign Exchange too pressured the markets. However losses remained capped on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 222.34 crore on April, 25 2016, as per provisional data released by the stock exchanges.

On the global front, US markets ended lower on Monday. Asian markets were trading in red following the negative cues from Wall Street and as oil prices eased overnight. Investors preferred to stay on the sidelines ahead of central bank policy decisions later in the week.

Back home, most of the sectoral indices on BSE were reeling under pressures, stocks from Consumer Durables, FMCG, Bankex, Auto and Capital Goods counters were the prominent losers of the session. On the flip side, stocks from Metal, Realty and Power counter were the only gainers of the session. The market breadth on BSE was negative in the ratio of 702:751, while 82 scrips remained unchanged.

The BSE Sensex is currently trading at 25573.16, down by 105.77 points or 0.41% after trading in a range of 25549.05 and 25617.70. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.11%, while Small cap index was down by 0.20%.

The gaining sectoral indices on the BSE were Metal up by 0.93%, Realty up by 0.08% and Power up by 0.07%, while Consumer Durables down by 1.08%, FMCG down by 0.61%, Bankex down by 0.48%, Auto down by 0.41% and Capital Goods down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.65%, Mahindra & Mahindra up by 0.76%, HDFC Bank up by 0.55%, NTPC up by 0.54% and ONGC up by 0.24%. On the flip side, ICICI Bank down by 2.19%, GAIL India down by 1.64%, Adani Ports &Special down by 1.36%, Sun Pharma Inds. down by 1.35% and Hero MotoCorp down by 1.29% were the top losers.

Meanwhile, government has banned the import of electronic items, mobile phones, milk and milk products and some steel products from China. Union Commerce Minister Nirmala Sitharaman said that India has banned import of these items from China over quality concerns. Mobile phones not bearing the International Mobile Station Equipment Identity number or other security features cannot be imported from China, while import of milk and milk products from China was banned as their quality was unacceptable.

The Commerce Minister however said that complete ban of import from any country is not possible now due to WTO rules even if we have problems diplomatically, territorially or militarily. While some opposition members asked to impose a blanket ban on Chinese goods, the minister cited safeguards available to restrict import of poor quality goods as well as trade defence measures such as anti-dumping and countervailing duty, she said 'India has an elaborate and robust legal framework and institutional set-up to protect its environment, life and health of its people, plants and animals.”

India’s trade deficit with China was at $48.68 billion during 2015-16 (April-February), with a total bilateral trade of $65.16 billion during the period. The Commerce Minister said that increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power, while India's exports to China are characterised by primarily and intermediate products.

The CNX Nifty is currently trading at 7830.05, down by 25.00 points or 0.32% after trading in a range of 7822.55 and 7839.00. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.20%, Tata Steel up by 1.70%, Ambuja Cement up by 1.12%, Mahindra & Mahindra up by 0.83% and Indusind Bank up by 0.77%. On the flip side, ICICI Bank down by 2.23%, GAIL India down by 1.57%, Sun Pharma Inds. down by 1.37%, HCL Tech. down by 1.24% and Bajaj Auto down by 1.24% were the top losers.

Asian markets were trading in red, Taiwan Weighted increased 3.08 points or 0.04% to 8,563.36, Nikkei 225 decreased 223.97 points or 1.28% to 17,215.33, Hang Seng decreased 171.85 points or 0.81% to 21,132.59, Jakarta Composite decreased 66.89 points or 1.37% to 4,811.97, FTSE Bursa Malaysia KLCI decreased 11.93 points or 0.7% to 1,702.58, Shanghai Composite decreased 8.15 points or 0.28% to 2,938.52 and KOSPI Index decreased 0.4 points or 0.02% to 2,014.15.