Benchmarks make horrendous start; Sensex breaches 27,000 level

Indian equity benchmarks have made a gap-down opening and are witnessing blood-bath in early deals, with frontline gauges trading with a cut of over two and a half percent, breaching their crucial 27,000 (Sensex) and 8,350 (Nifty) levels. Sentiments remained down-beat after Donald Trump took a narrow lead over rival Hillary Clinton in the early results of the hotly-contested polls, US media projected, as they notched up wins in their respective Republican and Democratic bastions but were in a dead heat in battleground states. Traders also reacted negatively to the government’s historic decision to withdraw Rs 500 and Rs 1,000 notes from circulation at midnight, saying this decision was taken to break the grip of corruption and black money. Prime Minister Narendra Modi said the notes of Rs 500 and Rs 1000 “will not be legal tender from midnight tonight” and these will be “just worthless pieces of paper.”  RBI Governor Urjit Patel said that this step will help to put an end to the circulation of fake money and that they have increased the production of the new currency.

Weak global cues too dampened sentiments with all the Asian counters trading in red at this point of time, as early state exit polls in the US presidential election showed wins for both candidates and no clear trend as yet. Back home, selling was both brutal and wide-based as none of sectoral indices on BSE could manage to trade in green. Counters which featured in the list of worst performers included realty, consumer durables and basic material. All the stocks on the Sensex were trading in red, while only one stock on the Nifty managed to trade in green.

The BSE Sensex is currently trading at 26932.09, down by 659.05 points or 2.39% after trading in a range of 25902.45 and 27026.28. All the 30 stocks on the Sensex were trading lower.

The broader indices were trading in red; the BSE Mid cap index tumbled 3.88%, while Small cap index was down by 4.28%.

The top losing sectoral indices on the BSE were Realty down by 11.23%, Consumer Durables down by 7.28%, Basic Materials down by 3.99%, Power down by 3.69% and Auto down by 3.28%, while there were no gainers on the BSE sectoral front.

The top losers on the Sensex were Mahindra & Mahindra down by 5.25%, Adani Ports &Special down by 4.85%, Hero MotoCorp down by 4.14%, HDFC down by 4.04% and Bajaj Auto down by 3.91%.

Meanwhile, Finance Minister (FM) Arun Jaitley has said that the Centre will push up reforms to attract more investment and fill up infrastructure deficit faster than now, though he emphasized that there is a lot of anxiety on the growth front. He said that unlike developing economies, voices seeking protectionism are almost absent as the economy expands.

According to Jaitley, one of the great strengths of the Indian economy is that even though India is growing at the fastest rate than any major economy, but by the their own standard they are still not satisfied. There is a great amount of impatience in India and a far greater amount of realization that they can grow even faster. He added that after seven decades of independence, India’s voice is increasingly getting noticed in the world, therefore to reform more, to open more, to attract more investment, to expand more in manufacturing, they need to fill up the infrastructure deficit faster than what they have been doing.

Further, he said that manufacturing sector have growth potential. The share of manufacturing has to increase to 25 per cent from 15 per cent level and this recognized that it creating far more jobs and expanding far better. He also said that there is a huge potential to grow in the eastern India and rural areas have a deficit and offer a tremendous potential to invest. He added that after deciding to quit the European Union, Britain is looking outside Europe and sees countries like India as one of its great future partners in trade and business.

The CNX Nifty is currently trading at 8342.50, down by 201.05 points or 2.35% after trading in a range of 8002.25 and 8351.15. There was 1 stock advancing against 50 stocks declining on the index.

The lone gainer on Nifty was Lupin up by 0.50%, while Mahindra & Mahindra down by 5.34%, Ambuja Cement down by 5.11%, Ultratech Cement down by 4.90%, Adani Ports &Special down by 4.69% and Tata Power was down by 4.50% were the top losers.

All the Asian counters were trading in red; Nikkei 225 tumbled 746.28 points or 4.35% to 16,425.10, Hang Seng declined 646.73 points or 2.82% to 22,262.74, Taiwan Weighted dropped 198.23 points or 2.15% to 9,019.20, Jakarta Composite shed 73.8 points or 1.35% to 5,396.88, KOSPI Index decreased 50.32 points or 2.51% to 1,953.06, Shanghai Composite fell 41.66 points or 1.32% to 3,106.23 and FTSE Bursa Malaysia KLCI was down by 12.39 points or 0.74% to 1,651.43.