Benchmarks plunge further; Nifty below 5,700 mark

Indian equities added losses to continue its weak trade hovering near the lowest point of the day in the late afternoon session on back of selling in frontline counters and taking cues from European counterparts. The sentiments in the market were dampen after poor earnings posted by index heavyweight State Bank of India (SBI), the bank reported 30 per cent year-on-year jump in quarterly profits for the fiscal second quarter ending September 2012 at Rs 3,660 crore aided by lower provisioning for bad loans, the gross Non-performing assets (NPAs) stood at 5.15% versus 4.99% quarter-on-quarter. All the 13 sectoral indices in BSE were trading in red with PSU, Oil & Gas and Bankex sector being the prominent ones. In the scrip specific development, United Spirit is trading firm in weak market on hopes that its parent company will finalize a deal to sell a stake to Diageo soon. Indian Hotels was trading in green after Orient Express rejected the Tata Group firm’s $1.86 billion buyout offer. ONGC was trading under pressure after posting a bigger-than-expected fall in July-September net profit due to higher subsidies. The market will remain open on Diwali day i.e. November 13, 2012 for the ‘muhurat’ trading session which will be conducted for 75 minutes on both the leading bourses NSE and BSE. The trading would be conducted between 3.45 pm and 5 pm on that day.

On the global front, all Asian markets were trading in red barring Taiwan Weighted while the European markets were too trading on pessimistic note. The European Central Bank held interest rates steady and ECB President Mario Draghi stated that the economic forecast had worsened with the central bank still ready to start its bond-buying plan if governments meet the required conditions. Besides, the Ifo Economic Climate Indicator for the euro area dropped to 81.7 in the fourth quarter from 88.9 in the third quarter as assessments of the current economic situation deteriorated and the six-month economic outlook was significantly more negative. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,700 and 18,700 levels respectively. The market breadth on BSE was negative in the ratio of 1019:1644 while 141 scrips remain unchanged.

The BSE Sensex currently trading at 18,691.74, down by 154.52 points or 0.82% after touching a high and a low of 18,894.42 and 18,656.41 respectively. There were 6 stocks advancing against 24 declines on the index.

The broader indices were too trading on a weak note; the BSE Mid cap edged lower by 0.72% and Small cap index was trading down by 0.52%.

All the sectoral indices were trading in red on BSE, PSU down 1.50%, Oil & Gas down by 1.31%, Bankex down by 1.14%, Capital Goods down by 1.00% and Consumer Durables down by 0.85% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 0.41%, Bajaj Auto up by 0.35%, Maruti Suzuki up by 0.26%, Jindal Steel up by 0.22% and Tata Power up by 0.20%.

On the flip side, SBI down by 3.51%, ONGC down by 3.28%, BHEL down by 1.64%, Sterlite Industries down by 1.61% and ICICI Bank down by 1.44% were the top losers on the Sensex.

Meanwhile, in an attempt to trigger investment growth, the centre has affirmed that the decision on setting up the National Investment Board (NIB) for single window clearance for large infrastructure projects is likely in next two to three weeks. The proposal was mooted by Finance Minister P Chidambaram at the full meeting of the Planning Commission recently, amid concerns on long delays in the implementation of large infrastructure projects.

The NIB is being set up to ensure that the clearances required for major projects, mainly projects above Rs 1,000 crore investment, would be granted by the relevant ministries without unnecessary delays. The blueprint for the NIB was already put forth in the Cabinet meeting in late September, provides the board the power to overrule other ministries.

As per the proposal, if clearances were not given by the concerned ministries within a specified time-frame, the projects would be sent to the NIB, which will be chaired by the Prime Minister and the members will constitute the ministers of finance and law. The decision taken by the board on whether the project can proceed will be considered final after that and no ministry will have the power to raise objections.

NIB plan is part of the government's aggressive reforms agenda to stimulate financial growth and it also aims to address a looming industrial complaint that ministerial clearances delay crucial mega projects.

The S&P CNX Nifty is currently trading at 5,690.45, down by 48.30 points or 0.84% after trading in a range of 5,751.70 and 5,677.75. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Ultratech Cement up by 0.98%, Cipla up by 0.38%, Bajaj Auto up by 0.31%, Jindal Steel up by 0.27% and Cairn India up by 0.21%.

On the flip side, SBI down by 3.51%, ONGC down by 3.39%, IDFC down by 2.75%, Bank of Baroda down by 2.01% and Sesa Goa down by 1.96% were the major losers on the index.

Most Asian equity indices were trading in the red barring Taiwan Weighted which was up 0.70% was the lone gainer amongst Asian pacific shares while Kospi Composite  declined 0.52%, Jakarta Composite lost 0.36%, Straits Times edged lower by 0.18%, KLSE Composite was trading lower by 0.04%, Hang Seng  plunged 0.85%, Nikkei 225 plummeted 0.90% and Shanghai Composite declined 0.12%.

The European markets were trading in red with, France’s CAC 40 lost 0.36%, Germany’s DAX dropped 0.45% and the United Kingdom’s FTSE 100 descended 0.05%.