Indian markets slide in early trade on weak Asian cues, Indian rupee

After witnessing two days of gains, domestic bourses once again started feeling selling pressure with both Sensex and Nifty opening with a cut of over half a percent following weakness in Asian markets and the Indian rupee. Most of the Asian equity indices were trading in the red. The major cause of concern for market participants remained growing debt restructuring challenges in Europe while the third downgrade of Spain's credit rating in less than a month by Egan-Jones Ratings also prompted investors to take profits off the table. Back home, the Indian rupee resumed the weakness against the US dollar in the opening deals. The rupee opened weaker by 0.5% at 56 against dollar. On the sectoral front software remained the lone gainer on the Sensex while, major part of the blow was absorbed by auto, banking and capital goods stocks. Meanwhile, Tata Motors remained the top loser among the Sensex, down by about 8 percent despite the company reporting robust Q4FY12 results after the market hours yesterday. The consolidated net profit rose to Rs 6,234 crore, from Rs 2,637 crore in the year-ago quarter. The broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 556 shares on the gaining side against 854 shares on the losing side while 65 shares remained unchanged.

The BSE Sensex opened at 16,391.90; about 47 points lower compared to its previous closing of 16,438.58, and has touched a low of 16,299.53 while high remained its opening.

The index is currently trading at 16,324.84 down by 113.74 points or 0.69%. There were 6 stocks advancing against 24 declines on the index.

The overall market breadth has made a negative start with 37.69% stocks advancing against 57.90% declines. The broader indices too were trading in the red; the BSE Mid cap and small cap indices declined 0.54% and 0.43% respectively.

The only gaining sectoral index on the BSE was IT up by 0.06%. While, Auto down by 3.15%, Bankex down by 1.24%, CG down by 1.12%, Realty down by 0.98% and Metal down by 0.79% were the top losers on the index.

The top gainers on the Sensex were ONGC up by 1.42%, Sun Pharma up by 1.30%, Tata Motors up by 0.59%, GAIL up by 0.58% and Infosys up by 0.33%.

On the flip side, Tata Motors was down by 7.85%, DLF was down by 2.05%, BHEL was down by 1.54%, SBI was down by 1.52% and L&T was down by 1.34% were the top losers on the Sensex.

Meanwhile, government has cleared 25 foreign direct investment (FDI) proposals worth Rs 2,973.40 crore. These include AIF III of Mauritius and Microqual Techno of Mumbai. The investments have been cleared after they were recommended by the Foreign Investment Promotion Board (FIPB) headed by Economic Affairs Secretary R Gopalan.

AIF III Sub Pvt Ltd proposes to bring in FDI worth Rs 1,000 crore by inducting foreign investment in the units of a Fund constituted as a Trust. Microqual Techno on the other hand,  plans to carry out business of wireless telecommunications. The proposals are worth Rs 1000 crore and Rs 522.90 crore respectively.

Another proposal by Mauritius based Mozart for infusion of foreign investment in an existing company in the pharmaceuticals sector (brownfield investments) has also been approved. The company has proposed to bring in investment worth Rs 300 crore.

Sun Pharma Research Company's proposal to carry out the development of new proprietary drugs through infusion of foreign equity by way of issue of partly paid up shares, too has been cleared.

Other proposals which have been approved includes, Genworth Financial Mortgage Guaranty India worth Rs 124 crore, Plethico Pharmaceuticals, Mumbai  worth Rs 500 crore and Kintetsu World Express (India), Karnataka  worth Rs 267.69 crore. While the proposals which got rejected were, Budenheim India, New Delhi; Hey House Publishers (I) and Growing Opportunity Finance (India), Chennai. The proposals on which decisions were deferred include Fabindia Overseas, Paragon Asset Reconstruction, Tara Aerospace Systems and Netmagic Solutions.

In its last meeting held earlier this month the board had rejected eight proposals and deferred decision on 13 applications. India allows FDI in most of the sectors through automatic route, but approval of FIPB is required in certain sensitive sectors, like defence and telecom.

The S&P CNX Nifty opened at 4,964.25; about 26 points lower compared to its previous closing of 4,990.10, and has touched a high and a low of 4,964.80 and 4,945.70 respectively.

The index is currently trading at 4,952.75, lower by 37.35 points or 0.75%. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.37%, ONGC up by 1.37%, ACC up by 0.89%, Cairn up by 0.68% and GAIL up by 0.56%.

On the flip side, Tata Motors down by 7.91%, Axis Bank down by 2.27%, DLF down by 2.13%, SAIL down by 1.99% and BPCL down by 1.87%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite eased 6.80 points or 0.28% to 2,382.83, Hang Seng Index got lacerated by 392.42 points or 2.06% to 18,663.04, Jakarta Composite slipped 3.17 points or 0.08% to 3,915.90, Nikkei 225 plunged 85.18 points or 0.98% to 8,571.90, Straits Times Index dropped 12.27 points or 0.44% to 2,789.58, KOSPI Composite Index sank 16.06 points or 0.87% to 1,833.85 and Taiwan Weighted plummeted 103.33 points or 1.41% to 7,238.96.

On the other hand, only KLSE Composite inched up 0.21 points or 0.01% to 1,565.11.