Markets continue to languish into negative territory with massive losses

The local barometer gauges continued to languish into negative territory with massive losses on sustained selling pressure by market-participants. Sentiments on the street remained on pessimistic mood with Chief Economic Adviser Arvind Subramanian’s statement that Indian economy continues to face multiple challenges and stressed on the need to tackle them on various fronts, such as exchange rate, public investments while maintaining macroeconomic stability. Further, subdued trend in Asian markets and selling witnessed in Realty, Basic Materials and Metal stocks, too weighed on the sentiments. Investors also ignored the report that Prime Minister Narendra Modi would unveil the much-awaited stimulus package during a scheduled speech to the BJP national executive meeting later today. Sell off also continued in broader indices, with both mid cap and small cap indices down in the range of 1.28%-2.00%. In scrip specific development, Deepak Fertilisers and Petrochemicals Corporation (DFPCL) was up by over 3 percent on plan to set-up brown field IPA plant.

Asian markets were trading mostly in red, on lingering tensions over North Korea and concern that weekend election results in Germany may add to political uncertainty in the euro zone. Back home, the BSE Sensex is currently trading at 31626.49, down by 295.95 points or 0.93% after trading in a range of 31573.32 and 32016.52. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.28%, while Small cap index was down by 2.00%.

The only gaining sectoral index on the BSE was Utilities up by 0.30%, while Realty down by 2.65%, Basic Materials down by 2.27%, Metal down by 2.23%, Capital Goods down by 2.01% and Industrials down by 1.75% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.68%, Power Grid up by 0.62%, TCS up by 0.61%, ICICI Bank up by 0.40% and Hindustan Unilever up by 0.38%. On the flip side, Adani Ports & SEZ down by 3.04%, Tata Steel down by 3.03%, Larsen & Toubro down by 2.52%, Kotak Mahindra Bank down by 2.21% and Lupin down by 2.18% were the top losers.

Meanwhile, attributing fall in India’s GDP growth to demonetisation and newly-rolled out Goods and Services Tax (GST) regime, Former Reserve Bank of India (RBI) governor C Rangarajan has said that the stimulus package being contemplated by the government to bolster the economy should emphasis on raising capital expenditure in order to catalyse private investment. He also made a case for recapitalisation of public sector banks (PSBs) so that they could provide more funding to the private sector.

For achieving a growth rate of 6.5 percent in FY18, Rangarajan has pointed out that the country would need to grow by at least 7 percent in the remaining three quarters of the current fiscal. Talking about demonetization move, he said that adequate preparation by the central bank could have reduced the pain which people had to undergo on account of ban on high value notes last November.

On the stimulus package, Former RBI governor has said that it should focus on increasing public expenditure with the aim to reinvigorate private investments. He suggested that two or three things can be done. Firstly, he noted that there have been a number of stalled projects, and the low hanging fruit is to ensure that these stalled projects are activated and those stalled projects which are viable must be immediately made operational. Secondly, he stressed on the need to recapitalization of the banking system so that they can provide additional credit for investment as well.

The CNX Nifty is currently trading at 9861.45, down by 102.95 points or 1.03% after trading in a range of 9836.20 and 9960.50. There were 10 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 1.93%, Bharti Infratel up by 1.12%, Power Grid up by 0.93%, GAIL India up by 0.74% and TCS up by 0.59%. On the flip side, Adani Ports & SEZ down by 3.14%, Tata Steel down by 3.13%, Indiabulls Housing Finance down by 3.05%, Ambuja Cement down by 2.78% and ACC down by 2.68% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 320.19 points or 1.15% to 27,560.34, Taiwan Weighted dipped 113.79 points or 1.09% to 10,335.89, Jakarta Composite dropped 11.8 points or 0.2% to 5,899.91, Shanghai Composite was down by 8.96 points or 0.27% to 3,343.57, KOSPI Index shed 8.31 points or 0.35% to 2,380.40 and FTSE Bursa Malaysia KLCI decreased 1.26 points or 0.07% to 1,769.78.

On the flip side, Nikkei 225 was up by 101.13 points or 0.5% to 20,397.58.