Bleak European counterparts send equity markets to intra-day’s low level

Lack of upside triggers in domestic markets combined with pessimistic global leads are prompting obliteration for Indian equity markets, which have now trickled down near their intra-day’s low level, with the barometer gauges trading with nasty laceration of over a percentage. 30 share barometer index, Sensex, tanking over 200 points, is currently trading its 17000 bastion, while 50 share index, Nifty, too knocking off over 50 points is off its 5150 level. The broader indices too have enticed additional weakness.

Negative European set-up combined with lack of policy announcement on reform front post presidential polls, are factors responsible behind the free fall of equity markets in the noon trade. European shares plummeted in early trade as heightened fears about Spain's ability to stave off a sovereign bailout prompted investors to seek refuge of safe-haven fixed income assets. Riskier assets fell on Monday after tiny Murcia was on course to become the second region in Spain, the euro zone's fourth-largest economy, to request financial assistance from the central government.

Closer home, stocks from Metal, Realty and Capital Goods were the prominent losers. However, even Retail shares receded on reports that the Samajwadi Party (SP), Left parties and JD(S) urging Prime Minister Manmohan Singh for not allowing foreign direct investment (FDI) in multi-brand retail. Those on the losing side were, Pantaloon Retail India, Trent, Provogue India, Shoppers Stop, CESC, and Brandhouse Retails, which plummeted in the range of 4-7%.

The BSE Sensex  plunged 212.08 points or 1.24% to trade at 16,946.36, after trading as high as 17047.73 and as low as 16,943.52. There were 3 stocks advancing against 27 declines on the index.

The broader indices too slipped further in the red terrain; the BSE Mid cap and Small cap indices were down by 1.06% and 0.73% respectively.

On the BSE sectoral space, there was no gainer on the index , while Metal down by 2.62%, Realty down by 2.20%, Capital Goods down by 2.06%, Power down by 2.01% and Auto down by 1.88% were top losers on the index.

Dr Reddys Lab up by 0.86%, Tata Power up by 0.15% and TCS up by 0.02% were only gainers on the Sensex, while Maruti Suzuki down by 5.33%, Sterlite Industries by 3.76%, Hindalco Industries down by 3.16%, BHEL down by 3.04% and Tata Steel down by 2.90% were major losers on the index.

Meanwhile, leveling the field play for local banks, the monetary regulator, Reserve Bank of India (RBI), has hiked the priority sector lending limits for foreign banks with 20 or more branches in the country to 40% from the current 32% of total credit. However, the target for foreign banks having less than 20 branches in India remains unchanged at 32%, without any sub-targets. These new limits will be brought into effect in a phased manner over a time period extending to a maximum of five years starting from April 1, 2013. Further, these lenders would have to submit an action plan for achieving the target over a specific time frame to be approved by the RBI.

Further, as per the revised guideline, education and home loans up to the specified limits, and advances to individuals for up to Rs 50,000 to clear debts of money lenders, will be treated as priority lending. Further, in the home loan segment, advances of up to Rs 25 lakh in cities with population of over 10 lakh, and Rs 15 lakh in other towns, will be treated as priority lending. Earlier, all loans up to Rs 25 lakh for purchase and construction of dwelling units constituted priority lending. However, the targets for both direct and indirect agricultural lending are kept unchanged at 13.5% and 4.5% of Adjusted Net Bank Credit, respectively.

The other areas in the new priority sector list include loans to micro and small service enterprises and micro and small manufacturing enterprises, loans to food and agro-processing units, overdrafts of up to Rs 50,000 in 'no-frills' accounts, loans to distressed farmers indebted to non institutional lenders, loans to State Sponsored Organizations for scheduled castes and scheduled tribes, loans to individuals other than farmers up to Rs 50,000 to pre-pay their debt to non-institutional lenders and loans to individuals for setting up off-grid solar and other off-grid renewable energy solutions for households.

The S&P CNX Nifty is currently trading at 5,141.95, down by 63.15 points or 1.21% after trading as high as 5,164.20 and as low as 5,136.35. There were 4 stocks advancing against 45 declines, while 1 share remained unchanged on the index.

The top gainers on the Nifty were DR Reddy up by 0.86%, ACC up by 0.60%, Grasim Industries up by 0.37% and Tata Power up by 0.15%, while, Maruti down by 5.80%, Sterlite Industries down by 4.00%, Hindalco Industries down by 3.48%, Sesa Goa down by 3.22% and JP Associates down by 3.09% were the major losers on the index.

Asian equity indices were trading in red; KLSE Composite declined 0.32%, Hang Seng plummeted 2.84%, Kospi Composite lost 1.84%, Jakarta Composite descended 1.79%, Nikkei 225 down 1.86%, Straits Times down 0.91%, Taiwan Weighted down  1.90% and Shanghai Composite plunged 1.33%.

European markets stared off on a scary note; France’s CAC 40 descended 1.61%, Germany’s DAX lost 1.26% and the United Kingdom’s FTSE 100 plunged 1.51%.