Greece woes combined with Rupee qualms raises specter of concerns in Indian equity markets

Cuts have intensified at D-Street, wherein the bourses in the wake of global risk-averse environment, have abandoned gains. Lingering concerns over vulnerable rupee, in the backdrop of massive RBI’s intervention too, is haunting the mind of nervy investor’s. Hitting a new five month low, Indian rupee, which is rampantly approaching a record low of 54.30 hit in December, has raised specter of concerns into Indian equity markets.  After taking a breather in previous session, 30 scrip sensitive index, Sensex, on BSE, witnessing mayhem in early deals, has breached its 16100 psychological level, similarly, the widely followed 50 share index, Nifty, too is tanking beneath the 4900 bastion. Picture is no different for broader indices, which in sync with front line indices have succumbed substantial weight, to trade with lesion of above 0.75%.

Failed attempts to form a new government in Greece, jolted financial markets at the prospect that leftists opposed to the terms of an EU bailout could sweep to victory in a June election, thereby tipping the euro zone deeper into crisis. Asian indices, too staggering under Greece Political turmoil, are endorsing weakness. The US future indices, too are showing sharp downtick in the screen trade.

Back home, selling is witnessed across the board, however, stocks from  Oil & Gas counter, are only one’s depicting resilience on account of falling Brent crude prices. Meanwhile, stocks from Auto, Metal and Power are topping the list of ‘worst performers’. The overall market breadth on BSE, is in the favour of declines which have thrashed advances in the ratio of 1378:718, while 92 shares remained unchanged.

The BSE Sensex is currently trading lower by 278.17 points or 1.70% at 16,050.08, after touching a high of 16132.68 and low of 16014.09. There were just 3 stock advancing against 27 declining one’s on the index.

The broader indices too dived into sea of red; the BSE Mid cap and Small cap indices declined 0.91% and 0.83% respectively.

The only gaining index on BSE sectoral front, was Oil & Gas which was trading up by 0.02%, while the major losing sectoral indices on the BSE were, Auto down by 2.93%, Metal down by 2.23%, Power down by 2.21%, Realty down by 2.14% and Bankex down by 1.79%.

The few gainers on the Sensex were Gail India up by 0.92%, ONGC up by 0.04% and TCS up by 0.01%.

On the flip side, Tata Motors was down by 6.13%, HDFC down by 5.14%, BHEL down by 3.44%, Maruti Suzuki down by 3.44% and DLF was down by 2.84% were the top losers on the Sensex.

Meanwhile, the Federation of Indian Exporters Organization (FIEO) has asked the government to extend the interest subvention scheme on rupee credit for another one year in the upcoming annual supplement to the foreign trade policy (FTP) expected to be announced in the first week of June.

Ajay Sahai, the Director General of FIEO said that 'We are of the view that the interest subvention should be extended to all export-oriented sectors'. We are expecting the Commerce Ministry to move a proposal to the Finance Ministry on this.

The scheme ended on March 31, 2012. Exporters from handicrafts, handloom, carpet, and small & medium enterprises (SMEs) sectors were provided the benefit under the scheme.

FIEO further stated that the increase in bank interest rates for exporters from 7% to over 12% in a span of two years is a serious concern and it should be addressed in order to make Indian exporters competitive against its competitors.

The organization has also recommended that additional markets and new products should be included under the Focus Market Scheme (FMS) and the Market Linked Focus Product Scheme (MLFPS). All the export related schemes which are there at the moment for the benefit of the exporters should be continued.

The S&P CNX Nifty is currently trading at 4,858.10, lower by 84.70 points or 1.71%. The index has touched a high and low of 4,882.25 and 4,850.30 respectively. There were only 6 stocks advancing against 44 declines on the index.

The top gainers of the Nifty were BPCL up by 2.84%, Cairn up by 2.55%, Bank of Baroda up by 2.24%,  Gail India up by 0.84% and ONGC up by 0.48%.

On the flip side, Tata Motors down by 6.06%, HDFC down by 5.04%  JP Associates down by 3.91%, Maruti Suzuki down by 3.64%, and BHEL down by 3.46%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite declined by 0.54%, Hang Seng plunged 2.77%, Jakarta Composite got thrashed by 2.47%, KLSE Composite lost 0.94%, Nikkei 225 sank 1.49%, Straits Times Index dived 1.24%, KOSPI Composite slumped 2.68% and Taiwan Weighted surrendered 2.18%.