Benchmarks collapse on political upheaval

It turned out to be a daunting session of trade for the Indian stock markets, which extended the southbound journey after a day’s break on Thursday and gave up around a percentage points. The frontline gauges remained choppy through the day and drifted to lowest point in the session in the last leg of trade as political jitters dampened the sentiments after Trinamool Congress chief Mamata Banerjee decided to withdraw support from United Progressive Alliance (UPA) government on the issue of diesel price hike 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.

Domestic markets, after a sedate opening, gained some strength in late morning trade paring some losses on hopes that the government may get support from Samajwadi party (SP) and Bahujan Samaj party (BSP) to stay in power. Moreover, public sector oil marketing companies too provided some strength to the markets as shares of companies like BPCL, HPCL and IOC all edged higher on the back of continuously fall in international crude prices. But, widespread selling pulled the indices lower and they closed near the lowest point of the day. Sentiment also remained gloomy as rupee fell to its lowest in nearly a week on Thursday as a key ally of the country's ruling coalition withdrew its support.

The global cues too remain subdued as European counters traded with a cut of half a percent in the early session on weaker manufacturing PMI data. The German Manufacturing PMI contracted to 47.3, but better than expected. While, all the Asian markets shut shop in negative trajectory amid weak manufacturing data of China, which increased worries over country’s economic condition. Japan’s Nikkei 225 ended in negative territory losing over 1% as the nation’s exports fell 5.8% in August from a year earlier, the third straight decline, on weakness in demand from the European Union and China.

Back home, selling in Metal space too dampened the sentiments as stocks like Sterlite Industries, Bhushan Steel, JSW Steel, Tata Steel, Sail and Hindalco Industries edged lower following fall in global metal prices. Selling pressure was also witnessed in Capital goods stocks, which declined by about two percent on BSE sectoral front on profit booking after a recent rally. However, on the positive side, IT shares gained strength during the trade after Indian rupee depreciated to a week’s low level in early deals on Thursday tracing the sluggish local equities after Trinamool Congress withdrew its support in protest against the government. Moreover, FMGG stocks too aided sentiments as monsoon rainfall in India remained 44% above average.

The NSE’s 50-share broadly followed index Nifty, plunged by a percent to settle below the psychological 5,600 support level while Bombay Stock Exchange’s Sensitive Index - Sensex sank by about one hundred fifty points to finish below the crucial 18,350 mark. Moreover, the broader markets too finished on a bleak note with cuts of around a percent in tandem with their larger peers.

The markets rose on overall volumes of over Rs 1.35 lakh crore, which remained on the higher side as compared to that on Tuesday. Moreover, the market breadth remained in favor of advances as there were 1,204 shares on the gaining side against 1,594 shares on the losing side while 114 shares remain unchanged.

The BSE Sensex lost 146.76 points or 0.79% to settle at 18,349.25, while the S&P CNX Nifty declined by 45.80 points or 0.82% to close at 5,554.25.

The BSE Sensex touched a high and a low of 18,443.92 and 18,291.93 respectively. However, the BSE Mid cap index was down by 0.65% and Small cap index down by 0.53%. 

Bajaj Auto up by 2.31%, TCS up by 1.62%, ONGC up by 1.21%, Wipro up by 0.93% and ITC up by 0.92% were top gainers on the Sensex, while BHEL down 3.62%, Gail India down 3.58%, Coal India down 2.99%, Sterlite Industries down 2.80% and Tata Steel down 2.73% were top losers on the index.

The major gainers on the BSE sectoral space were, IT up 0.84%, TECk up 0.73% and FMCG up 0.15%, while Metal down 2.28%, Capital Goods (CG) down 1.94%, Power down 1.63%, Oil & Gas down 1.43% and Bankex down 1.10% were top losers on the BSE sectoral space.  

Meanwhile, exports from the European Union (EU) to India have reportedly declined 6% to 19.3 billion euro from 20.6 billion euro for January-June 2012 as against the same period last year. However, EU's import pattern was mixed. The largest increases for imports were from Norway 11%, South Korea and the US both 9%.

Indian exports to the 27-member EU, declined by 11% to 18.4 billion euro from 20.6 billion euro in the period January-June 2012 as compared to the same period last year. The largest fall was recorded with India (- 11%) and Japan (- 5%).

On the other hand, EU exports to most of its major clients grew in the same period, excepting India (-6%) and Turkey (-2%). Russia and South Korea both registering 18%, Japan 16% and Brazil 15% were notable increases for exports for the EU.

The S&P CNX Nifty touched a high and low of 5,581.35 and 5,534.90 respectively.

The top gainers on the Nifty were BPCL up by 2.53%, Bajaj Auto up by 2.14%, TCS up by 1.24%, ONGC up by 1.19% and Ranbaxy up by 1.06%. On the flip side, BHEL down by 4.27%, GAIL down 3.89%, Reliance Infra down 3.39%, Tata Steel down 3.13% and Axis Bank down by 3.11% were top losers.

The European markets were trading in red, France's CAC 40 down by 0.80%, Germany's DAX down by 0.44% and United Kingdom’s FTSE 100 down by 0.61%.

Following previous day’s impressive gains, Asian markets ended lower on Thursday amid weak manufacturing data of China, which increased worries over country’s economic condition. Japan’s Nikkei 225 ended in negative territory losing over 1% as Finance Ministry reported 5.8% decline in the exports from the world’s third-largest economy in August from a year earlier. Mixed U.S. housing data also pressurized the markets to an extent. Shanghai Composite closed in red losing over 2% to end at a more than three-and-a-half year low as the weak PMI data witnessed decline in demand in both domestic and overseas markets. Seoul market fell remarkably amid doubts over the outlook for growth in China, while benchmark Kospi was dragged down by profit booking in tech and oil stocks.