Benchmarks nose dive to intra-day’s low; Nifty dangerously close of breaching 5300 mark

Persistent selling pressure has dragged benchmark equity indices to intra-day low level, as cautious undertone of global equity markets continue to weigh on risk appetite of investor’s. Traders across the globe have resorted to cautious approach ahead of Friday's meeting of central bankers at Jackson Hole, Wyoming. However, even fading hopes of policy reforms from the monsoon session of Parliament is doing its part to add to the downside pressure of the bourses.

30 share barometer index of Bombay Stock Exchange (BSE), Sensex, offloading over 75 points, is trading sub 17550 level, while widely followed index, Nifty, declining over 25 points, appears dangerously close of breaching the 5300 psychological mark. The broader indices, meanwhile, too have succumbed to selling pressure. On the global front, European markets are exhibiting sluggish trend on Wednesday after the Catalonian region in Spain asked for a financial lifeline from the national government, raising concerns that the country itself will soon ask for a bailout.

Closer home, much of pressure is exerted from stocks belonging from Auto, Metal and Capital Goods counters; however, Health Care, Fast Moving Consumer Goods and Bankex are attempting to soothe some jittery nerves. Auto shares have lost steam on concerns that sales growth in August would remain subdued on account of high interest on auto loans and rising fuel price. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1403:1021, while 124 shares remained unchanged.

The BSE Sensex is currently trading at 17,541.21, down by 90.50 points or 0.51% after touching a high of 17653.90 and low of 17,534.34. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap indices were down by 0.26% and 0.24% respectively.

The top gainers on the BSE sectoral space were, Health Care up by 0.27%, Fast Moving Consumer Goods (FMCG) up by 0.21% Bankex up by 0.07%, while Auto down by 1.30%, Metal down by 1.13%, Capital Goods down by 0.92% Public Sector undertaking down by 0.90% and Realty down by 0.86%were the losers on the index.

Tata Power up by 2.55%, Wipro up by 1.14%, Cipla up by 0.95%, Jindal Steel up by 0.79% and HDFC Bank up by 0.71% were the major gainers on the Sensex, while Sterlite Industries down by 3.68%, Bajaj Auto down by 3.56%, BHEL down by 2.71%, ONGC down by 2.36% and Hero MotoCorp down by 1.76% were the major losers on the index. 

Mean while, sensing growing split within Cabinet over the contentious Land Acquisition and Rehabilitation and Resettlement (LARR) Bill, 2011, Prime Minister (PM) Manmohan Singh referred the same to a group of ministers (GoM), after its provisions were hailed as 'flawed' and clauses relating to compensation were criticized for being anti-growth.

The very political bill was floated after the government decided to amend the provisions of Land Acquisition bill of 1894 when strong protest against land acquisition, especially in tribal areas, rocked states in 2007. The idea was to abate the absolute powers of state governments to acquire land by specifying in the bill the purpose for which it could be done.

Ironically, despite being endorsed as United Progressive Alliance’s gift to the aam admi, the bill was met with fierce flak by the party’s own ministers during Tuesday’s cabinet meeting. With no price for guessing, the Trinamool Congress (TMC) was also vocal in its opposition to the Bill. However, even vehement argument was put up from urban development minister Kamal Nath who condemned that the bill would stall all activity, from metro rail to urbanization and industrialization.

However, Rural Development Minister Jairam Ramesh, who has been keen on pushing the Bill, is optimistic  that there would not be much of trouble to clear the bill, as 25 out of the 28 recommendations of the standing committee, were accepted. 

The S&P CNX Nifty is currently trading at 5,307.00, down by 27.60 points or 0.52% after trading in a range of 5,345.50 and 5,303.50. There were 10 stocks advancing against 40 declines on the index.

The top gainers on the Nifty were Tata Power up by 2.86%, Wipro up by 1.26%, HDFC Bank up by 0.75%, Cipla up by 0.71% and Ambuja Cement up by 0.67%. While, JP Associates down by 6.96%, SAIL down by 4.59%, Sterlite Industries down by 3.50%, Bajaj Auto down by 3.49% and Sesa Goa down by 3.45% were top losers on the index.

Asian indices were trading mixed; Kospi Composite Index up by 0.64%, Nikkei 225 added 0.40%, Taiwan Weighted advanced 0.40% and Straits Times gained 0.25% while  KLSE Composite was trading flat,  Hang Seng lost 0.04%, Shanghai Composite plunged 0.80% and Jakarta Composite down by 0.46% were the losers.

European markets got off to a cautious start; DAX declined by 0.02%, CAC 40 edged lower by 0.20% and FTSE 100 lost 0.34%