Markets suffer sharp plunge; Sensex below 19000 level

After a positive start Indian equity markets, pared all gains and plunged sharply into red following a brief stoppage in trading due to a technical glitch in the NSE cash segment. The BSE Sensex was dragged below 19000 level, while NSE Nifty slumped on profit booking after yesterday’s rally owing to big-ticket reforms approved by the Cabinet on Thursday. In currency markets, Indian rupee appreciated against dollar but pared some early gains. On the sectoral front realty stocks have declined sharply. Shares from power, information technology, healthcare, banking and capital goods sectors were mostly in the negative territory with notable losses, while FMCG and automobile stocks were finding modest support. In global markets, all Asian markets were trading in green on Friday after the European Central Bank said it was ready to buy bonds of troubled euro zone countries, while markets awaited a key US jobs report. Back home, the market breadth was favoring negative trend; there were 663 shares on the gaining side against 1876 shares on the losing side while 84 shares remained unchanged.

The BSE Sensex is currently trading at 18885.63 down by 172.52 points or 0.91% after trading in a range of 19137.29 and 18757.34. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.38% and Small cap index was lower by 1.71%.

The only two gainers on the BSE sectoral space were, Auto up by 0.50% and FMCG up by 0.16%. While, Realty down by 1.89%, TECk down by 1.83%, IT down by 1.68%, Bankex down by 1.32% and Power down by 1.07% were the top losers on the sectoral space.

The top gainers on the Sensex were Coal India up by 1.60%, Tata Motors up by 1.35%, Hindustan Unilever up by 1.31%, Mahindra & Mahindra up by 1.28% and GAIL up by 0.29%. On the other hand, HDFC down by 4.15%, Wipro down by 2.62%, Bharti Airtel down by 2.24%, BHEL down by 1.88% and Infosys down by 1.86% were top losers on the Sensex.

Meanwhile, the slowing industrial production and industry bodies repeated plea to lower the interest rate may not get any early hearing, as the Reserve Bank Governor D Subbarao has said that the central bank's efforts would be to rein in inflation and support growth to the extent possible, indicating a few more measures to be announced to restrain inflation at its forthcoming policy meeting on October 30.

The apex bank which has kept its key policy rates unchanged since April because of inflationary pressure and widening fiscal and current account is likely to stick to a hawkish stance, as Subbarao has reiterated that inflation was not at a comfort level and more steps are required to keep inflation in check. Though, he said that opening of foreign direct investment (FDI) in the retail sector would bring down inflation as it would bring a lot of benefits to the country, producers, consumers and others. Has also said that competitive pricing would be beneficial to consumers.

'Those growth drivers are productivity improvement, entrepreneurial talent, demographic profile of the country, last middle class market, the potential for increasing savings and enormous capacity levels in the country and they are intact. I am sure that we can grow much faster than we are today,' Subbarao said.

The governor however, said it must be noted that inflation level was brought down from double-digit to around 7.5 now, only because of the continuous and constant efforts, taken over a period, by the RBI and the Government. He said RBI will make an assessment of inflation, the external sector and the fiscal outlook in its monetary policy.

The S&P CNX Nifty is currently trading at 5,728.95, down by 58.65 points or 1.01% after trading in a range of 5,815.35 and 4,888.20. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were, Coal India up by 1.66%, HUL up by 1.49%, M&M up by 1.42%, Tata Motors up by 1.31% and GAIL up by 0.49%. While, HDFC down by 4.15%, JP Associates down by 3.90%, IDFC down by 3.22%, Reliance  Infra down by 2.85% and Wipro down by 2.61% were top losers on the index.

All the Asian equity indices were trading in the green; Hang Seng was up by 0.35%, Jakarta Composite was up by 0.80% Straits Times was up by 0.38% KLSE Composite was up by 0.06%, Nikkei 225 was up by 0.44%, Kospi Composite was up by 0.12% and Taiwan Weighted was up by 0.11%.

Financial markets in China remained closed.