Markets slide aggravate as selling intensifies in blue chips

Domestic bourses have slipped further in the mid morning trade lacking any supportive cues, the regional peers too were trading lower with most of the indices down by over a percent, adding pressure to the local markets. The broader markets that were showing some resistance too, have given up and were trading marginally in red. On the sectoral front only auto sector stocks were in green, while the oil & gas sector was the biggest laggard led by the plunge in the market heavyweight RIL stocks on reports that the Comptroller and Auditor General (CAG) is likely to carry out a performance audit similar to its first round rather than limit itself to scrutinizing the financial accounts of its Andhra offshore gas field. Though, the PSU oil marketing companies were showing mixed trend after the government decided to increase the commission paid to petrol pump dealers. The petroleum ministry has reportedly increased the dealer commission on petrol from Rs. 1.499 per litre to Rs. 1.799 a litre and on diesel from 91 paise to Rs. 1.09 a litre. On the same time dollar has strengthened against rupee. There were some result reactions too, M&M was trading high on posting good numbers, ICICI Bank and IDFC were trading higher ahead of their numbers.

The BSE Sensex is currently trading at 18650.45, down by 108.18 points or 0.58%. There were only 4 stocks advancing against 26 declines on the index.

The broader indices have slipped into red, though still performing better than benchmarks; the BSE Mid cap index was down by 0.06% while Small cap index lost 0.09%.

Oil and Gas down by 0.92%, HC down by 0.83%, CD down by 0.82%, FMCG down by 0.75% and PSU down by 0.43% were the top losing sectors on the BSE. While, Auto up by 0.41% was the lone gainer.

The gainers on the Sensex were M&M up by 1.45%, ICICI Bank up by 0.58%, Sterlite Industries up by 0.40% and Tata Motors up by 0.25%.

On the other hand top laggards included, RIL down by 1.64%, Dr Reddy’s down by 1.54%, ITC down by 1.53%, HDFC down by 1.44%, and Sun Pharma down by 1.35%.

Meanwhile, the government has cleared the sale of 10 percent stake in iron ore giant NMDC besides allowing a ministerial panel to look at options other than auction. Based on current market prices, the sale can fetch the government around Rs 7,000 crore out of its disinvestment target of Rs 30,000 crore for the current financial year. The Finance Ministry is hopeful of raising Rs 12,000-13,000 crore from stake sale in the public sector undertakings (PSUs) by December-end.

Other companies whose shares could be sold include steelmaker SAIL, India's largest power generator NTPC, and mining & mineral companies Coal India and MMTC. The government has approved the proposal to sell 10 percent stake in Oil India and another 9.59 percent disinvestment in Hindustan Copper, while 12.15 percent stake sale of Nalco and 9.33 percent in MMTC through Offer for Sale (OFS) route. The government is trying to attract inflows from a new category of foreign investors, QFIs - largely individuals and family offices.

Finance Ministry officials are engaging in hectic discussion with the PSUs to speed up the process so that the disinvestments can take place in the December and March quarters which could help the government to rein in fiscal deficit to around 5.3 per cent of the GDP in 2012-13. Although the government had pegged fiscal deficit for the current financial year at 5.1 per cent in the budget, but it seems unlikely to achieve due to rising subsidy bill and lower tax collection so far.

The S&P CNX Nifty opened is currently trading at 5,672.25, down by 33.05 points or 0.58%. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were M&M up by 1.53%, HCL Tech up by 0.70%, Cairn India up by 0.58%, ACC up by 0.55% and IDFC was up by 0.48%.

On the flip side, JP Associates down by 2.62%, Kotak Bank down by 2.34%,Sun Pharma down by 1.66%, ITC down by 1.59% and  RIL down by 1.53% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite plunged by 1.66%, Hang Seng declined by 0.98%, Nikkei 225 slumped by 1.16%, Kospi Composite fell by 1.68% and Taiwan Weighted was down by 1.58%.

Indonesian Jakarta Composite, Malaysia’s KLSE Composite and Singapore’s Straits Times remain closed on account of public holiday.