Sluggish start of European counters add to the selling pressure at Dalal Street

Sluggish start of European counterparts have added to the selling pressure of benchmark equity indices, as global growth concerns have now started haunting local investor’s which already are reluctant of adding position on the penultimate day of F&O expiry. Much of the pressure is being exerted from the stocks belonging from the Metal, Consumer Durables and Oil & Gas counters, which continuing to be on selling spree, have emerged as top laggards. However, stocks from Fast Moving Consumer Goods, Consumer Durable and Oil & Gas, emerging as the prominent gainers, have limited the downside of the bourses. Thus, after dipping to intra-day’s low level, 30 share index, Sensex, is trading sub 18650 level. However, 50 share index, Nifty, despite offloading quarter percent, is trading above 5650 crucial level. Meanwhile, broader indices too have pared some gains

On the global front, European shares fell on Wednesday as weak corporate results, quarter-end profit taking and doubts over the effectiveness of the Fed's latest monetary stimulus after S&P 500 suffered its worst day since June on Tuesday, weighed on the investors mind.

Back home, stocks from Realty counters amassed significant gains as hopes of controversial Land Acquisition, Rehabilitation and Resettlement Bill seeing the light of the day cheered investor’s. Further, even cement stocks, viz, ACC, UltraTech Cement and Prism Cement, have firmed up on optimism of higher demand as monsoon season comes to an end. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1400:1203, while 126 shares remained unchanged.

The BSE Sensex is currently trading at 18,633.37, down by 61.04 points or 0.33% after trading in a range of 18,670.48 and 18589.24. There were 12 stocks advancing against 16 declines on the index, while 2 stocks remained unchanged.

The broader indices pared some gains; the BSE Mid cap and Small cap indices were trading higher by 0.57% and 0.83% respectively.

On the BSE sectoral space, FMCG up by 1.01%, Health Care up by 0.91%, Consumer Durables up by 0.43%, Oil & Gas up by 0.34% and Realty up by 0.20% were top gainers. While Metal down by 0.76%, CG down by 0.69%, TECk down by 0.64%, Bankex down by 0.56% and PSU down by 0.52% were the top losers.

The top gainers on the Sensex were Cipla up by 2.63%, ITC up by 1.29%, Gail India up by 0.82%, Hindustan Unilever up by 0.73%, and Reliance Industries up by 0.43%. On the other hand, Bharti Airtel down by 3.64%, Coal India down by 2.17%, Hindalco Industries down by 1.68%, HDFC Bank down by 1.49% and Tata Motors down by 1.23% were top losers on the Sensex.

Meanwhile, continuing UPA's reforms juggernaut, the controversial Land Acquisition, Rehabilitation and Resettlement Bill, too may see the light of the day, as EGoM meets on September 27. However, ahead of the first meeting of the Group of Ministers on the land bill, Rural Development Minister, Jairam Ramesh, casting its votes much in the favour of the proposed land bill, asserted that the bill besides balancing the needs of economic growth with concerns of the common man, would also ease the bottleneck caused by litigations to industrial and infrastructure projects.

The land bill, which comes in the wake of tough economic environment for UPA government, provide with an opportunity to showcase how it can give thrust to industrialization and economic growth while protecting the interests of landowners and those whose livelihood depends on the land.

Meanwhile, Jairam Ramesh, in a note for the meeting scheduled for Sept 27, has argued that the existing Land Acquisition Act, 1894 shows little consideration for those whose land is acquired. The current law has led to lengthy litigations resulting in unreasonable cost escalations. Further, government statistics reveal that 70 per cent of acquisitions are challenged in courts because of forced acquisition, absence of safeguards, appeals and rehabilitation and resettlement, indiscriminate invocation of the urgency clause and low rate of compensation.

Batting for the much contentious bill, Ramesh has also underscored on the thorny issue of state autonomy. As according to the bill, states will have autonomy to deal with key issues such as calculating compensation and acquiring multi-crop or irrigated land.

As per the note, although there will be no enhancement of the market value of the land acquired in urban areas , but the compensation to ameliorate hardship on account of acquisition of such lands will be raised to 100 per cent of the market value from 30 per cent earlier. But for rural land, the market value will be enhanced with a multiplier to calculate upon the compensation. The broad principle is that the multiplier will be lower for land in proximity to the urban centre.

The S&P CNX Nifty is currently trading at 5,659.65, down by 14.25 points or 0.25% after trading in a range of 5,672.80 and 5,643.75. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were ACC up by 3.49%, Cipla up by 2.62%, Ambuja Cement up by 2.59%, ITC up by 1.30% and Ranbaxy Lab up by 1.18%. While, Bharti Airtel down by 3.52%, IDFC down by 3.12%, Coal India down by 2.35%, Hindalco Industries down by 1.92% and Bank of Baroda down by 1.85% were top losers on the index.

Most of the Asian indices were trading in red, Shanghai Composite plunged 1.38%, Kospi Composite Index declined 0.55%, Taiwan Weighted slid 0.83%, Hang Seng declined 0.63%, Nikkei 225 descended 2.03%, Jakarta Composite lost% and Straits Times surrendered 0.59%. On the other hand, KLSE Composite was holding up by meager 0.01%.

European markets again got off to a red start; with CAC 40 declining by 1.29%, DAX losing 0.90% and FTSE100 descending by 0.76%.