Sensex plunges to day’s lows tracking weak European market opening

Stock markets in India have plummeted to session’s lows in Thursday afternoon trades with the benchmark equity indices even drifting below the psychological 5,150 (Nifty) and 16,950 (Sensex) levels. After suffering about a percent cut in the previous session, the frontline indices have once again gone to give up over a percentage points thanks to the across the board profit booking on the March series futures and options contract expiry session. Selling pressure in local markets got aggravated after the negative opening for European markets which extended their declining momentum for third straight session on growing worries over global economic slowdown. The Asian peers too remained in somber mood as investors at large took to hefty risk aversion amid reports that new orders for US durables increased only modestly in February, while a gauge of future business investment also fell short of expectations, spurring qualms over the pace of recovery in the world's largest economy. On the domestic front, the reports that India's core sector industries' output grew 6.8% year on year in February, failed to prop-up sentiments. It had grown 6.4% Growth in February 2011. The growth is significantly higher than the average of 4.4% seen during the financial year so far (April to February). Investors were seen squaring off hefty positions from the Capital Goods counter after the numbers were released and the index slumped over one and half a percent being top laggard in the space. The IT and Power counters too plunged over a percent each in the session and dragged the frontline indices. Though there appeared absolutely no sectoral gainer in the space, however some individual heavyweight names like Coal India, Hero Moto and Jindal Steel managed to keep their heads above the water and traded with notable gains.

Moreover, the broader markets though showed some resilience as the Small Cap index bucked the pessimistic trend and traded with around a quarter percent gains, outperforming all its larger peers. The bourses dropped on extremely large volumes of over Rs 1 lakh crore while market breadth on BSE was in favor of declines in the ratio of 1282:1180 while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 16,947.86 down by 173.76 points or 1.01% after trading as high as 17,045.76 and as low as 16,941.68. There were 3 stocks advancing against 27 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap index slipped 0.46% and Small cap gained 0.27%.

On the BSE sectoral space, there were no gainers, while Capital Goods down 1.51%, IT down 1.48%, TECk down 1.29%, Power down 1.25% and FMCG down 1.19% were the major losers in the space.

Coal India up 1.68%, Hero Moto up 1.05% and Jindal Steel up 0.37% were the only gainers on the Sensex, while BHEL down 2.24%, Tata Steel down 1.98%, ITC down 1.81%, Infosys down 1.75% and Cipla down 1.70% were the major losers in the index.

Meanwhile, Pakistan’s shift towards the negative list to trade with India will lead to greater opportunities for Indian exporters, observed the Minister of State for Commerce and Industry Jyotiraditya Scindia. The Minister has stated that India is looking at enhancing its bilateral trade ties with Pakistan.

The Commerce Minister, Anand Sharma had visited Pakistan in February, and a joint statement had been issued, firmly reiterating that both sides would religiously adhere to the roadmap drawn for full normalisation of trade relations.

The Ministry is also proposing to take steps to revive some of the pre-partition road links, and a dialogue has been initiated in this regard.  The opening of Munabao/Khokharapar route for trade is being explored in consultation with the stakeholders.

On March 21, Pakistan issued a notification for switching over to a negative list from the existing positive list regime for trade with India, under which the import of only 1,209 Indian products will be barred. The shift will allow India to export 6000 items to Pakistan from the current 2000. In 2010-11, the bilateral trade between the two countries stood at $ 2.7 billion. Both sides have now set a target of $6 billion by 2014.

The S&P CNX Nifty is currently trading at 5,155.05, lower by 39.70 points or 0.76% after trading as high as 5,167.90 and as low as 5,139.45. There were 9 stocks advancing against 41 declines on the index.

The top gainers on the Nifty were Ranbaxy up 3.08%, Coal India up 1.98%, Hero Moto up 1.54%, JP Associates up 1.04% and Jindal Steel up 0.55%.

BHEL down 2.16%, ACC 2.04%, R Com down 2.02%, Siemens down 1.80% and R Infra down 1.77% were the major losers on the index.

In the Asian space, Shanghai Composite plunged 1%, Hang Seng plummeted 1.53%, Jakarta Composite eased 0.20%, Nikkei 225 declined 0.67%, Straits Times dropped 0.49%, Seoul Composite slipped 0.85% and Taiwan Weighted nosedived 2.06%.

On the other hand only KLSE Composite gained 0.03%.

The European markets were trading in red as France’s CAC 40 eased 0.20%, Germany’s DAX fell 0.41% and Britain’s FTSE 100 dropped 0.17%.