Domestic bourses make gap-down opening tracking global weakness

Key Indian benchmarks have made a gap-down opening in early trade following weakness in global markets after investors shifted their focus on US fiscal cliff from Obama’s victory. But the short covering and buying on dips helped the market pare losses immediately. Global cues too remain subdued as the US markets went through a sharp post election sell-off overnight and Dow slipped below the 13,000 mark for the first time since early August. There was concern among the investors after Fitch warning that if Obama don’t move quickly to avoid the fiscal cliff, it could lead to downgrade in 2013. While, all the Asian equity indices were trading in the red at this point of time as investors worried about the fiscal crisis in the United States. Moreover, there was concern regarding China’s Communist Party meet to pick a new leader and as Japan’s machinery orders fell more than expected in September.

Back home, Sensex and Nifty lost their crucial 18,900 and 5,750 levels respectively as funds and retail investors preferred to book profits after six sessions of gains amid a weak trend in global markets. Moreover, selling in software pack too dampened the sentiments as the sector tumbled about a percent in early trade due to Obama’s anti-outsourcing stance, which has been an electoral winner for him. However, the gauges recovered some lost ground as there is some relief for the foreign investors, as the market regulator SEBI has allowed them to re-invest half of their investments in debt holdings to the next calendar year, starting from January 2014. Profit booking in banking and realty space too dampened the sentiments after two days of continuous rally.

On the sectoral front, auto and healthcare remained the only gainers on the index while, software, power and bankex remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 681 shares on the gaining side against 894 shares on the losing side while 60 shares remain unchanged.

The BSE Sensex opened at 18,779.74; about 123 points lower compared to its previous closing of 18,902.41, and has touched a high and a low of 18,836.21 and 18,736.45 respectively.

The index is currently trading at 18,818.82, down by 83.59 points or 0.44%. There were 8 stocks advancing against 22 declines on the index.

The overall market breadth has made a negative start with 41.65% stocks advancing against 54.48% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices rose 0.30% and 0.21% respectively.

The few gaining sectoral indices on the BSE were, Auto up by 0.50% and HC up by 0.30%. While, IT down by 0.85%, Power down by 0.81%, Bankex down by 0.72%, TECk down by 0.64% and CG down by 0.58% were the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.06%, Sun Pharma up by 1.42%, Bharti Airtel up by 0.30%, Coal India up by 0.26% and Cipla up by 0.19%.

On the flip side, Tata Power was down by 2.02%, Wipro was down by 1.35%, ICICI Bank was down by 1.30%, Infosys was down by 1.22% and GAIL was down by 1.13% were the top losers on the Sensex.

Meanwhile, amid peaking interest and inflation rates, the industry body FICCI has projected a modest recovery in the growth of the manufacturing sector during the October-December quarter. It noted that key manufacturing segments such as automotive, capital goods, metals and chemicals are expected to register a nominal growth. With the sluggish performance in manufacturing sector and contraction in capital goods output, industrial growth had dipped to 2.7% in August.

It also noted that sectors like chemicals, textiles, auto and machine tools might grow in low pace with less than 5% rate and four sectors like FMCG, capital goods, cement and leather are likely to witness moderate growth with a growth rate between 5% and 10% in the third quarter of 2012-13. While the segments like tyre, ceramics and electronics are likely to witness strong growth of more than 10% during the period.

About 70% of the respondents out of responses from 364 manufacturing units polled that they are not likely to hire new workforce in next three months. Even though, the survey indicated that there were positive impacts in the overall business environment with the series of reform measures by the government to trigger growth, including widening FDI in retail, aviation and power exchanges.

The S&P CNX Nifty opened at 5,709.00; about 41 points lower compared to its previous closing of 5,760.10, and has touched a high and a low of 5,734.75 and 5,693.95 respectively.

The index is currently trading at 5,729.05, down by 31.05 points or 0.54%. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Tata Motors up by 2.47%, Sun Pharma up by 1.54%, Ranbaxy up by 1.06%, BPCL up by 0.62% and Bharti Airtel up by 0.52%.

On the flip side, Tata Power down by 2.02%, Infosys down by 1.41%, ICICI Bank down by 1.37%, Wipro down by 1.35% and GAIL down by 1.12%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite declined by 20.09 points or 0.95% to 2,085.64, Hang Seng plunged by 262.34 points or 1.19% to 21,837.51, Jakarta Composite lost 43.85 points or 0.99% to 4,307.27, KLSE Composite was down by 6.36 points or 0.39% to 1,639.17, Nikkei 225 lost 113.51 points or 1.27% to 8,859.38, Straits Times lost 29.54 points or 0.97% to 3,014.37, Kospi Composite declined by 26.65 points or 1.37% to 1,910.77 and Taiwan Weighted was down by 71.90 points or 0.99% to 7,216.76.