Benchmarks tumble in early trade; Nifty breaches 5,200 mark

Indian equity indices have made a lackluster opening as European Central Bank (ECB) disappointed investors. Overnight, the US markets ended on a soft note while, the Asian market counters opened in the red after ECB failed to deliver immediate action, also there were concern that Chinese monetary authorities too will go slow to ease policy. There were strong hopes that ECB will go for some stimulus measure, but it kept the rates unchanged, refraining from any immediate action to contain the euro zone debt crisis. Back home, the key domestic benchmarks lost their crucial 17,100 (Sensex) and 5,200 (Nifty) levels in early trade. The sentiments also got bashed after India Meteorological Department (IMD) saying that monsoon rains will not be enough to save the country from its first drought in three years. Metal, realty, auto, banks, power, capital goods and PSU stocks were witnessing the selling pressure in early trade. Moreover, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 474 shares on the gaining side against 869 shares on the losing side while 51 shares remained unchanged. 

The BSE Sensex opened at 17,164.48; about 60 points lower compared to its previous closing of 17,224.36, and has touched a low of 17,079.63 while high remain its opening.

The index is currently trading at 17,081.27 down by 143.09 points or 0.83%. There were only 4 stocks advancing against 26 declines on the index.

The overall market breadth has made a negative start with 34.00% stocks advancing against 62.34% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined 0.71% and 0.42% respectively.

The major losing sectoral indices on the BSE were, Metal down by 1.85%, Realty down by 1.35%, Auto down by 1.17%, Bankex down by 1.12% and Power down by 1.00%, while there were no gainers on the index.

The few gainers on the Sensex were Dr Reddy up by 0.90%, NTPC up by 0.30%, Infosys up by 0.13% and GAIL up by 0.09%.

On the flip side, Sterlite Industries was down by 2.53%, Hindalco was down by 2.27%, Tata Motors was down by 2.22%, Tata Steel was down by 2.22% and Jindal Steel was down by 2.17% were the top losers on the Sensex.

Meanwhile, in a move that could fast track the pace of reforms, Prime Minister Manmohan Singh on Thursday has approved relaxations in the transfer policy for the government land for infrastructure projects. To ensure that there is no procedural delay in acquiring government-owned land for infrastructure projects; PMO besides allowing all land transfer from ministries to PSUs, also eliminated the need of Cabinet approval required for transfer of government-owned land for infrastructure use.

Early last year, a ban had been imposed on all transfer of government owned lands to any entity except in cases where land was to be transferred from one government department to another. This was resulting into long delays in awarding concessions for infrastructure projects, particularly PPP projects. In the meanwhile, the Department of Economic Affairs was to prepare a comprehensive land transfer policy for government owned land. In case any department had to implement a project which required alienation of land either through lease, license or rent, it had to seek specific approval of the Cabinet. All PPP infrastructure projects - roads, railways, ports, civil aviation and metros - have some element of land alienation as the project is often built on government owned land.

With today’s decision all cases of land transfer from Ministries to statutory authorities or PSUs will be allowed, subject to the requirements of normal Government of India Rules; All cases of land transfer on lease or rent or license to a concessionaire which have been appraised through the PPPAC route and approved by the Finance Minister or by the Ministers concerned or by the Cabinet, as the case may be, depending upon the value of the project; and all cases related to the development and use of railway land by Rail Land Development Authority (RLDA) as per provisions of Railways Amendment Act, 2005 will be permitted.

The S&P CNX Nifty opened at 5,195.60; about 32 points lower compared to its previous closing of 5,227.75, and has touched a high and a low of 5,204.35 and 5,180.95 respectively.

The index is currently trading at 5,183.70, lower by 44.05 points or 0.84%. There were 7 stocks advancing against 43 declines on the index.

The top gainers of the Nifty were Dr Reddy up by 0.97%, Hero MotoCorp up by 0.32%, Infosys up by 0.32%, ONGC up by 0.04% and GAIL up by 0.04%.

On the flip side, Sterlite Industries down by 2.48%, RInfra down by 2.36%, Tata Steel down by 2.34%, Sail down by 2.25% and Sesa Goa down by 2.19%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was up by 10.30 points or 0.49% to 2,121.48.

On the other hand, Hang Seng plunged by 200.56 points or 1.02% to 19,489.64, Jakarta Composite lost 24.06 points or 0.59% to 4,069.18, KLSE Composite was lower by 2.81 points or 0.17 to 1,630.64, Nikkei 225 sank by 139.98 points or 1.62% to 8,513.20, Straits Times was down by 2.18 points or 0.07% to 3,034.01, Kospi Composite was down by 12.84 points or 0.69% to 1,856.56 and Taiwan Weighted was lower by 58.13 points or 0.80% to 7,209.81.