Persistent selling drifts Nifty below 5,100 mark

Indian equities further weakened in the late afternoon session as investors started dumping frontline blue chip counters in absence of any domestic triggers. Apart from the gloomy global tidings, the exacerbating concerns over depreciating Indian rupee have taken the center stage, prompting investors to take profits off the table. Traders were seen selling in Capital Goods, Bankex and Realty sector. The key benchmark indices extended intraday losses to slide to their lowest level in over three and half month lows on the back of persistent selling visible across the board with pessimism creeping in. In the scrip specific development, Cipla was seen trading firm in green on slashing prices of cancer drug by almost 75%. The Vijaya Mallaya-promoted Kingfisher Airlines was trading in red as it continues to hit air pockets with two real estate developers now slapping eviction notice for allegedly defaulting on rent payments since last November. Industry heavyweight RIL was seen trading weak in red on reports that the Oil Ministry has hiked the penalty it wants to impose on Mukesh Ambani owned Reliance Industries (RIL) and its British partner BP plc for diminishing natural gas output from KG-D6 fields, by 18 percent to $1.46 billion.

On the global front, the Asian markets were trading on a mix note while the European markets were trading in red on pessimistic note. The European Central Bank held interest rates at 1% yesterday and will resist calls to do more to fight the euro zone crisis, putting the onus on governments to foster growth and head off anger over austerity policies. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,100 and 16,900 levels respectively. The market breadth on BSE was negative in the ratio of 610:2062 while 93 scrips remained unchanged.

The BSE Sensex is currently trading at 16,827.74 down by 323.45 points or 1.89% after trading as high as 17,121.37 and as low as 16,821.66. There were 3 stocks advancing against 27 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index plunged 2.37% while Small cap sank 1.93%.

On the BSE sectoral space, there were no gainers, while Capital Goods down 3.63%, Bankex down 3.13%, Realty down 2.96%, Consumer Durables down 2.94% and Power down 2.62% were the major laggards in the space.

Cipla up 2.16%, Wipro up 0.65%, and HUL up 0.09% were the only gainers on the Sensex, while BHEL down 5.71%, Hero MotoCorp down 4.55%, ICICI Bank down 4.06%, L&T down 4.05% and DLF down 3.95% were the major losers in the index.

Meanwhile, a Parliamentary panel has recommended that a marketing fund be set up to support the efforts of Micro, Small and Medium Enterprises (MSMEs) sector. It is of the opinion that a corpus of at least Rs 1,000 crore should be set up to subsidise the marketing efforts of these companies.

The Parliamentary Standing Committee on Commerce headed by Shanta Kumar has also demanded that the 2% interest subsidy given to handicraft, handloom, carpet and SME sector which has ended on March 31 be extended.

It is also of the opinion that maximum investment limit in plant and machinery of MSME units should be increased from Rs 10 crore to Rs 25 crore so that the export units can increase their competitiveness in the global market.

The MSME sector offers a substantial share of 40% in India's exports but suffers due to lack of infrastructure, marketing and technology. Hence it is important that these companies be supported if India wants to achieve the target of doubling its share in world trade by 2020.

The S&P CNX Nifty is currently trading at 5,086.40, lower by 102.00 points or 1.97% after trading as high as 5,177.20 and as low as 5,084.45. There were 5 stocks advancing against 45 declines on the index.

The top gainers on the Nifty were Cipla up 2.27%, Asian Paints up 1.04%, Wipro up 0.63%, Ranbaxy up 0.34% and Dr Reddy’s up 0.28%.

BHEL down 5.71%, PNB down 5.31%, Bank of Baroda down 4.91%, Axis Bank down 4.83% and Hero MotoCorp down 4.55% were the major losers on the index.

In the Asian space, Hang Seng declined 0.77%, Jakarta Composite fell 0.37%, Straits Times Index fell 0.33% and KOSPI Composite dropped 0.30%.

On the flipside, Shanghai Composite gained 0.49%, KLSE Composite added 0.19% and Taiwan Weighted climbed 0.54%.

Stock markets in Japan remained closed on Friday on account of Greenery day.

The European markets were trading in red with, France’s CAC 40 sank 1.00%, Germany’s DAX shed 0.77% and Britain’s FTSE 100 slipped 0.62%.