Feeble global cues drag benchmarks lower; Sensex breaches 28,300 mark

Monday turned out to be a daunting session for the Indian equity indices, which got pounded by over a percentage point on feeble global cues. After gap-down opening, the domestic bourses never looked in recovery mood and continued moving northward to end at intraday lows, breaching their crucial support levels of 28,300 (Sensex) and 8,750 (Nifty). Investors were anxiously waiting the upcoming monetary policy review on October 4, the first to be held under newly appointed Reserve Bank of India (RBI) Governor Urjit Patel, amid expectations of a 25 basis point cut in the repo rate. But, market participants failed to get any sense of relief with RBI 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 part of the newly constituted MPC's mandate. Traders also shrugged off 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.

Selling got intensified after European counters made a feeble start on Monday, as investors trod cautiously ahead of an Organization of the Petroleum Exporting Countries (OPEC) producers meeting in Algeria this week. All the Asian markets ended in red terrain, as investors’ attention turned from central banks to American politics ahead of the first US presidential debate.

Back home, selling was both brutal and wide-based as most of sectoral indices on BSE ended in red terrain. Counters which featured in the list of worst performers included realty, telecom and auto. Sentiments were further weighed down after the India Meteorological Department (IMD) in its weekly monsoon update said that for the country, cumulative rainfall during this year’s monsoon has so far up to September 21, been 5% below long period average (LPA). Depreciation in Indian rupee too dampened the sentiments. The rupee was at 66.70 per dollar at the time of equity markets closing as compared to 66.66 per dollar level on Friday.

Stocks related to rate-sensitive counters mainly played spoil sport for the markets. Stocks of banking, realty and auto edged lower ahead of monetary policy review on October 4. In scrip specific developments, Minda Corporation tanked nearly 5% on the BSE after a more than 5% of total equity of the company changed hands via multiple block deals on the counter. Bucking the trend, GNA Axles made a good debut and ended the session with a gain of over 18%, against issue price of Rs 207 per share, on the BSE.

The NSE’s 50-share broadly followed index Nifty declined by around one hundred and ten points to end below the psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex tumbled by over three hundred and seventy points to finish below its psychological 28,300 mark. Broader markets too witnessed selling pressure and ended the session with a cut of over half a percentage point. The market breadth remained pessimistic, as there were 1,039 shares on the gaining side against 1,655 shares on the losing side, while 215 shares remained unchanged.

Finally, the BSE Sensex declined by 373.94 points or 1.30% to 28,294.28, while the CNX Nifty dropped 108.50 points or 1.23% to 8,723.05. 

The BSE Sensex touched a high and a low of 28630.92 and 28272.03, respectively and there were 5 stocks on gainers side against 25 stocks on the losers side on the index. The broader indices too made a negative closing; the BSE Mid cap index ended lower by 0.53%, while Small cap index was down by 0.55%.

The few gaining sectoral indices on the BSE were Energy up by 0.35%, Oil & Gas up by 0.08% and Metal up by 0.08%, while Realty down by 2.00%, Telecom down by 1.76%, Auto down by 1.72%, Industrials down by 1.58% and Bankex down by 1.56% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.41%, Dr. Reddys Lab up by 1.05%, TCS up by 0.83%, HDFC up by 0.54% and HDFC Bank up by 0.42%. On the flip side, Axis Bank down by 5.84%, Lupin down by 2.59%, Infosys down by 1.46%, Power Grid down by 1.46% and ICICI Bank down by 1.36% were the top losers.

Meanwhile, enthused by good response of the global investors, the government is planning to create three more sector specific sub-funds under the Rs 40,000-crore National Investment and Infrastructure Fund (NIIF). These sector specific sub-funds will be including one each for the development of airports and ports and one more.

The government last week announced that it is in the process of setting up two sub-funds one in clean energy which will primarily focus on renewable energy, and another fund with focus on highway projects. Economic Affairs Secretary Shaktikanta Das had said that investors were more interested in investing in specific, dedicated, sectoral fund rather than all-purpose, multi-sector umbrella fund, he also said that the umbrella fund will continue, but at the same time we are also moving on so those who invest in dedicated funds will also take stake in the bigger fund. He added that accordingly the government had to restructure and recast the structure and begin with two sectorally dedicated funds namely highway sector and clean energy fund.

The government had set up the Rs 40,000-crore NIIF in December last year as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects. The Centre is to contribute Rs 20,000 crore to the fund and the remaining Rs 20,000 crore is expected to be raised through sovereign wealth funds.

The CNX Nifty traded in a range of 8,809.55 and 8,715.10. There were 9 stocks in green against 42 stocks in red on the index.

The top gainers on Nifty were BPCL up by 2.94%, Coal India up by 1.23%, Zee Entertainment up by 1.15%, Dr. Reddys Lab up by 0.55% and Reliance Industries up by 0.40%. On the flip side, ONGC down by 4.22%, Tata Motors down by 3.21%, ICICI Bank down by 3.21%, NTPC down by 3.03% and Idea Cellular down by 2.67% were the top losers.

European markets were trading in red; Germany’s DAX declined by 170.91 points or 1.61% to 10,456.06, UK’s FTSE 100 dropped 83.07 points or 1.2% to 6,826.36 and France’s CAC was down by 82.37 points or 1.84% to 4,406.32.

The Asian markets ended lower on Monday after US shares fell in last session and as investors turned their attention to American politics ahead of tonight's first US presidential debate. Many traders were cautious ahead of the week-long National Day holiday starting on October 1. Chinese shares fell, with property stocks taking a fresh beating after Nanjing, capital of East China's Jiangsu province, adopted new rules restricting home purchases. Further, Japanese shares fell for a second consecutive session, as the dollar wobbled against the yen and euro ahead of this week's speeches by the heads of central banks in the US, Europe and Japan. However, oil prices recovered some lost ground in Asian deals, after Algeria's energy minister said the day before that all options were possible for an oil output cut or freeze at this week's informal meeting of OPEC producers.