Bourses resume southward journey; Sensex breaches below 16,900 level

Domestic benchmarks resumed their southward journey after a day of halt and snapped the day’s trade in the negative terrain. The investors remained on the sideline on penultimate session of July series Futures and Options expiry with total volumes recording second highest turnover at Rs 3 lakh crore. The sentiments remained subdued after the NSE took decision to remove 51 stocks from the F&O segment with effect from July 27, 2012. Also telecom companies’ shares butchered during the session as decision on spectrum fee by the EGoM headed by Home Minister P Chidambaram was deferred. Moreover, shares of three state-run oil marketing companies fell on report the government is unlikely to raise prices of diesel, cooking gas and kerosene in the near future for fear of opposition across the political spectrum. Fall in Rupee against dollar too dampened the sentiments. The rupee declined to 56.28/30 from its previous close of 56.12/13, though above session low of 56.44.

Investors remain concerned on mounting qualms over the government’s ability to launch few important reforms amid stiff resistance from various UPA allies and Opposition parties. Also, monsoon has been a major disappointment this year with near-drought situation across several parts of the nation. This has stoked speculation of a spike in food prices going forward, which propelled sell-off and key benchmarks lost their psychological 5,100 (Nifty) and 16,800 (Sensex) bastions.

On the global front, concerns about the ongoing debt crisis in Europe while worries over flimsy fiscal conditions of Spain and Greece, coupled with worries over slowdown in China weighed on the sentiment across Asian markets with most of the regional peers ending the session in the red terrain. However, local bourses regained their crucial 5,100 (Nifty) and 16,800 (Sensex) levels supported by firm opening in European counters. The sentiments in the European markets remained upbeat after European Central Bank policymaker Ewald Nowotny raised the prospect of steps that could boost the firepower of the euro zone's new bailout fund.

Back home, FMCG counters also helped markets to limit losses. The investors were taking interest in FMCG stocks after some of the companies like HUL, Dabur and Colgate-Palmolive reported better-than-expected Q1 numbers. However, selling in Metal sector pressurized markets till end and remained the top loser. Shares like SAIL, Jindal Steel & Power, Hindalco Industries, Sterlite Industries, Sesa Goa, Tata Steel and Nalco edged lower in the trade after the International Monetary Fund said China’s economy faces significant downside risks. China is the world's largest consumer of copper and aluminum.

The NSE’s 50-share broadly followed index Nifty, declined by about 20 points managing to settle just above its psychological 5,100 support level moreover, Bombay Stock Exchange’s Sensitive Index -Sensex- plummeted over seventy points to finish below the psychological 16,900 mark. Moreover, the broader indices also hammered and ended the session with a cut of over 0.80 percent each.

The overall volumes stood at over Rs 2.99 lakh crore, while the turnover for NSE F&O segment remained on the higher side as compared to that on Tuesday at over Rs 1.79 lakh crore. Moreover, the market breadth was largely in favour of decline, as there were 1,090 shares on the gaining side against 1,694 shares on the losing side while 116 shares remained unchanged.

The BSE Sensex lost 72.03 points or 0.43% to settle at 16,846.05, while the S&P CNX Nifty declined by 18.60 points or 0.36 to close at 5,109.60.

The BSE Sensex touched a high and a low of 16,899.01 and 16,736.60 respectively. The BSE Mid cap and Small cap index ended lower by 0.76% and 0.79% respectively.

ITC up 1.64%, Sun Pharma up 1.27%, Gail India up 0.41%, Cipla up 0.40% and TCS up 0.31% were top gainers on the Sensex, while Jindal Steel down 4.33%, Hindustan Unilever down 2.42%, Tata Steel down 2.41%, Bharti Airtel down 2.26% and Hindalco Industries down 2.26% were top losers on the index.

The top gainers on the BSE sectoral space were, FMCG up 0.41%, IT up 0.28% and Health Care (HC) up 0.04%, while Metal down 2.03%, Consumer Durables (CD) down 1.70%, Power down 1.41%, PSU down 0.91% and Capital Goods (CG) down 0.91% were top losers on the BSE sectoral space. 

Meanwhile, the central government has approved 14 foreign direct investments (FDI) proposals worth Rs 1,584 crore, in line with the recommendations from Foreign Investment Promotion Board (FIPB). It includes Rs 225 crore foreign investment in Indian operations of Asian equity research major CLSA, besides 13 other FDI proposals.

The proposed FDI in CLSA Singapore holdings is for induction of foreign equity in an investing company to start off the business of process outsourcing services for clients, both domestic and offshore. The government has also cleared the Rs 674 crore proposal of Maharashtra-based Abhijeet Power for induction of foreign equity in an investing company to make downstream investment.

Among other proposals, which have been cleared includes Netmagic Solutions to bring in FDI worth Rs 182.8 crore, Pune-based Bajaj Finserv to bring in investments worth Rs 100 crore ,Hyderabad-based Takshila Tech Parks and Incubators (India) amounting to Rs 182.5 crore, MF Global Sify worth Rs 81 crore.

Though14 FDI proposals were cleared; decisions on 15 other proposals were deferred due to various reasons. These include applications of Tara Aerospace Systems, Ordain Health Care Global, Sterlite Networks and Mauritius-based Cloverdell Investments. The FDI inflow in India during 2011-12 was about $36.50 billion.

The S&P CNX Nifty touched a high and low 5,121.60 and 5,076.60 respectively.

The top gainers on the Nifty were HCL Tech up 6.70%, Ambuja Cement up 4.07%, DLF up 1.69%, ITC up 1.60% and Sun Pharma up by 1.41%. On the flipside, Jindal Steel down 4.54%, SAIL down 3.66%, Reliance Infra down 2.99%, Tata Steel down 2.72% and Bharti Airtel down 2.61% were top losers on the index. 

The European markets were trading in green, France's CAC 40 was up 0.71%, Germany's DAX was up 0.52% and United Kingdom’s FTSE 100 was up 0.24%.

Asian markets ended lower on Wednesday amid Europe's debt crisis worries and disappointing earnings numbers of Apple in the US. Investors’ sentiments were dampened due to lower than expected earnings from one of the world's most famous consumer-electronics companies, which affected electronics companies in Asia. Nikkei ended into negative territory, hindered by a stronger currency and a broad selloff in technology companies following the Apple results. However, Japanese benchmark sank to a seven-week low, with bellwether electronics companies Sony SNE -0.43%and Panasonic 6752.TO -5.49%slumping 5.2% and 5.5% respectively.