Benchmarks make gap-down opening on political uncertainty

Indian equity indices have made a gap-down opening with bourses breaching their crucial 18,300 (Sensex) and 5,600 (Nifty) bastion on Thursday on the back of political uncertainty after Trinamool Congress chief Mamata Banerjee decided to withdraw support from United Progressive Alliance (UPA) government on the issue of fuel hikes and FDI in retail, as the government ruled out any rollback. The government now has to depend on outside support for survival and that may make the reform era difficult to progress further. Meanwhile, industry body FICCI, lauding the recent economic reform measures by the government has appealed to political parties to set aside their differences and support the government in its move.

However, the markets managed to pare some of their losses immediately on hopes that the government may get support from Samajwadi party (SP) and Bahujan Samaj party (BSP) to stay in power. Moreover, some amount of strength also came in from public sector oil marketing companies as shares of companies like BPCL, HPCL and IOC all edged higher on the back of continuously fall in international crude prices. On the sectoral front, fast moving consumer goods witnessed the maximum gain in trade followed by software and technology while, realty, capital goods and power remained the top losers on the BSE sectoral space. The broader indices too were trading relentlessly while, the market breadth on the BSE was negative; there were 525 shares on the gaining side against 988 shares on the losing side while 72 shares remain unchanged.

On the global front, the US markets closed modestly higher overnight after data showed the pace of home re-sales rose 7.8 percent in August, its fastest pace in over two years. Though the energy stocks continued their decline but traders followed the Federal Reserve’s last week decision to launch a new round of economic stimulus. All the Asian markets were trading in the negative terrain at this point of time on concern related to Europe and weak export data from Japan.

The BSE Sensex opened at 18,292.22; about 204 points lower compared to its previous closing of 18,496.01, and has touched a high and a low of 18,406.14 and 18,291.93 respectively.

The index is currently trading at 18,362.13, down by 133.88 points or 0.72%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a negative start with 33.12% stocks advancing against 62.33% declines. The broader indices too were bleeding badly; the BSE Mid cap and Small cap indices rose 1.07% and 0.79% respectively.

The only gaining sectoral indices on the BSE were, FMCG up by 0.46%, IT up by 0.21%, TECk up by 0.06% and HC up by 0.05%. While, Realty down by 2.40%, CG down by 1.95%, Power down by 1.35%, Metal down by 1.34% and CD down by 1.30% were the top losers on the index.

The top gainers on the Sensex were Jindal Steel up by 1.06%, TCS up by 0.98%, HUL up by 0.84%, Wipro up by 0.84% and Maruti Suzuki up by 0.68%.

On the flip side, BHEL was down by 3.51%, Sterlite Industries was down by 2.36%, GAIL was down by 2.29%, L&T was down by 2.02% and SBI was down by 1.97% were the top losers on the Sensex.

Meanwhile, in an attempt to boost India’s growth further, Union Commerce Minister Anand Sharma, at the end of the three-day conference of India's Heads of Foreign Missions, urged for enhancing  trading activities with emerging countries of Asia, Africa and Latin America and embracing the globe through sound trade and investment linkages that are mutually beneficial. The conference was attended by President of Indian Council for Cultural Relations (ICCR) Dr Karan Singh, Commerce, Industry and Textile Minister Anand Sharma and Environment Minister Jayanthi Natarajan.

Sharma pointed out that the centre’s aggressive measures to curtail burden of current account deficits and trade deficits and the changes in norms that are being planned, would boost much needed foreign investments into the country as the implementation of policies will provide positive impacts on the macroeconomic conditions of the country. He also figured the significance to further strengthen the historical trading ties of India with Africa, which is emerging as a commercial destination.

The president of ICCR, Karan Singh emphasized the importance of projecting India’s soft power and noted that culture, politics and economy are the three facts of the nation’s diplomatic engagement with the outside world. Commenting over the challenges in the field of environmental diplomacy and climate change negotiations, Jayanthi Natarajan, the Environment and Forest Minister pointed out that the nation’s top priority should remain as growth and development.

The S&P CNX Nifty opened at 5,536.95; about 64 points lower as compared to its previous closing of 5,600.05, and has touched a high and a low of 5,567.95 and 5,534.90 respectively.

The index is currently trading at 5,553.00, down by 47.05 points or 0.84%. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were HCL Tech up by 2.21%, Jindal Steel up by 1.11%, BPCL up by 1.11%, TCS up by 1.00% and Wipro up by 0.87%.

On the flip side, BHEL down by 3.51%, RNB down by 3.34%, Reliance Infra down by 3.25%, BOB down by 2.89% and JP Associates down by 2.75%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite was down 22.71 points or 1.10% to 2,045.12, Hang Seng as down 102.44 points or 0.49% to 20,739.47, Jakarta Composite was down 20.08 points or 0.47% to 4,224.63, KLSE Composite was down 20.56 points or 1.25% to 1,625.55, Nikkei 225 was down 135.63 points or 1.47% to 9,096.58, Straits Times was down 14.08 points or 0.46% to 3,061.55, KOSPI Composite was down 18.08 points or 0.90% to 1,989.80 and Taiwan Weighted was down by 73.54 points or 0.95% to 7,708.37.