Indian equities dip deeper in the red; sensex holds 28500 marks

Indian bourses adding losses, continued to trade in red in the noon session, with the Sensex losing over 150 points and Nifty falling below the 8900 level, on account of selling in front line blue chip counters. Sentiments remained subdued on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 299.98 crore on September 23, 2016. The global investment banks acknowledged India to be a bright spot among emerging market peers, but the valuation looks expensive. If earnings fail to bounce back, chances of a steep correction will increase. The domestic brokerage houses are also maintaining cautious approach as there is no evidence of any economic recovery out there at the moment, especially on the capex side, while private investment is also not picking up. Besides, weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the sentiment.

Investors are also tracking the progress of monsoon rains. The India Meteorological Department (IMD) in its weekly monsoon update issued said that for the country, cumulative rainfall during this year's monsoon has so far up to September 21, has been 5% below long period average (LPA). However, losses in the local markets remained capped with Reserve Bank of India’s Governor, Urjit Patel downplaying the risk of inflation and harping on the focus on growth. Patel reportedly said that the GST regime would not harden inflation and the growth objective will remain a part of the newly constituted MPC's mandate. Some support also came with Niti Aayog Vice-Chairman Arvind Panagariya’s statement that a good monsoon, reforms and timely decision making at the Centre will definitely push India’s growth beyond the 8 per cent mark in subsequent quarters of this fiscal. Meanwhile, the market will remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month September 2016 series to October 2016 series. The near month September 2016 derivatives contracts expire on September 29, 2016.

On the global front, Asian markets were broadly lower on Monday, as investors' attention turned from central banks to American politics ahead of the first U.S. presidential debate. The fall on Wall Street last week, also weighed on market sentiments in Asia. Market participants also await the outcome of a meeting of oil producers for any indication on limiting supply and supporting crude prices.

Back home, stocks from Realty, Power and Auto counters were supporting the markets, while those from Oil & Gas, Metal and PSU counters were adding to the underlying cautious undertone. In scrip specific development, Marksans Pharma has jumped after the company got US drug regulator nod for loratadine liquid filed capsules 10 mg. Furthermore, Vardhman Textiles has rallied after the company announced that the board approved a buyback of 6.13 million equity shares for Rs 1,175 per share.

The market breadth remained pessimistic as there were 1152 shares on the gaining side against 1177 shares on the losing side, while 158 shares remained unchanged.

The BSE Sensex is currently trading at 28503.40, down by 164.82 points or 0.57% after trading in a range of 28471.18 and 28630.92. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.05%, while Small cap index up by 0.10%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.05%, Metal up by 0.40%, PSU up by 0.32%, Power up by 0.09% and Consumer Durables up by 0.02%, while Bankex down by 0.94%, Auto down by 0.74%, FMCG down by 0.70%, TECK down by 0.41% and Realty down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.77%, Power Grid Corpn. up by 1.00%, Coal India up by 0.76%, Dr. Reddys Lab up by 0.62% and Tata Steel up by 0.59%. On the flip side, Bharti Airtel down by 2.26%, ICICI Bank down by 2.17%, Hero MotoCorp down by 1.48%, Adani Ports &Special down by 1.47% and ITC down by 1.38% were the top losers.

Meanwhile, in order to boost marine product exports, the Commerce and Industry Minister Nirmala Sitharaman has extended support to certain new products and enhanced a rate of incentives under the Merchandise Exports from India Scheme (MEIS), which includes establishing agencies in all coastal states for aquaculture and fisheries and export incentives for marine products. 

The government currently allocates Rs 22,000 crore yearly for exports under the MEIS, from the current fiscal onwards additional amount of Rs 1,500 crore has been announced to be included that will include certain marine and seafood items.  Sitharaman said that despite being a major producer, the country’s seafood industry has to go a long way in utilising its full potential for value addition.

She further said that the agencies for aquaculture and fisheries, under the guidance of the chief ministers and led by the chief secretaries of the states, will be under the aegis of the Marine Products Export Development Authority (MPEDA), the nodal body for marine exports under the ministry.

Recently, the minister had held discussions with trade ministers from Japan and South Korea and they have expressed interest in collaborating with India for development of aquaculture and hoped that MPEDA would play a major role for bringing the best practices of industry from around the world in order to speed up the growth of the country’s seafood industry.

The CNX Nifty is currently trading at 8782.25, down by 49.30 points or 0.56% after trading in a range of 8775.75 and 8809.55. There were 10 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.84%, BPCL up by 1.79%, Power Grid up by 1.14%, Tata Power up by 1.06% and Zee Entertainment up by 0.91%. On the flip side, ICICI Bank down by 2.25%, Bharti Airtel down by 1.96%, Hero MotoCorp down by 1.57%, Adani Ports &Special down by 1.51% and Mahindra & Mahindra down by 1.50% were the top losers.

Asian markets were trading in red; Hang Seng decreased 0.78%, Nikkei 225 fell 1.15%, Taiwan Weighted declined 0.97%, Jakarta Composite shed 0.61%, Shanghai Composite dropped 0.9%, KOSPI Index slipped 0.34% and FTSE Bursa Malaysia KLCI was down by 0.15%.