Benchmarks make gap down start on sluggish global cues

After witnessing bloodbath in previous session, the Indian equity indices once again made a gap down start as global concern spooked the markets sentiments. The US markets continued their plunge for yet another day with major indices deposing more than three percent overnight while, all the Asian counterparts barring Jakarta Composite were trading in the negative terrain at this point of time, indicating somber investors’ sentiment. Back home, continued offloading of stocks by funds and retail investors amid global weakness dampened the sentiments and BSE’s Sensex and NSE’s Nifty lost their crucial 16,200 and 4,900 mark respectively in the early trade. On the sectoral front, software and technology remained the only gainers while, metal, realty and banking remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction and were trading in the red with a huge cut of around two percentage at this point of time while, the market breadth has made a subdued start; there were 342 shares on the gaining side against 1,500 shares on the losing side while 38 shares remained unchanged. However, software stocks like Infosys, TCS, Wipro and HCL Tech edged higher in the trade after the rupee weakened to 50 against the dollar on Friday, a level not seen in more than 28 months, as investors globally continued to dump high yielding riskier assets for the safety of government bonds.

The BSE Sensex opened at 16,222.37; about 139 points lower compared to its previous closing of 16,361.15, and has touched a high and a low of 16,240.56 and 16,107.19 respectively.

The index is currently trading at 16,138.82, down by 222.33 points or 1.36%. There were just 8 stocks advancing against 22 declines on the index.

The overall market breadth has made a negative start with 18.19% stocks advancing against 79.79% declines. The broader indices too were bleeding badly; the BSE Mid cap and Small cap indices were down by 1.81% and 1.91% respectively.

IT up by 0.94% and TECk up by 0.06% remained the only gainer in the sectoral indices on the BSE. While, Metal down by 2.98%, Realty down by 2.53%, Bankex down by 2.25%, CD down by 2.18% and CG down by 2.17% were the top losers on the index.

The top gainers on the Sensex were TCS up by 1.29%, Infosys up by 0.87%, Tata Power up by 0.72%, HUL was up by 0.66% and Cipla was up by 0.65%.

On the flip side, Tata Motors down by 4.62%, Sterlite Industries down by 4.20%, Jaiprakash Associates down by 3.73%, Tata Steel down by 3.23% and DLF down by 3.06% were the top losers on the index.

Meanwhile, despite declining economic growth and persisting uncertainties in global environment, Finance Minister Pranab Mukherjee is hopeful that India will be able to achieve 8% growth in 2011-12. He said ‘we will have 8% growth even this year though the first quarter growth figure is 7.7%.’

Mukherjee said that a good monsoon could ensure agricultural growth of about ‘4 % plus’ and growth in the manufacturing and services sector clearly indicates that it will be possible for us to have the growth at around 8% for this year.’ On the growth projection for the next five year plan period, he said India has projected 9% growth for the 12th five-year Plan (2012-17) and the country is taking every necessary step to ensure that the momentum continues.

Stating international environment as area of concern he expressed his concern over the high ratio of sovereign debt to the GDPs of Eurozone nations and slow pace of recovery in industrialized economies. By adding further he said, inflationary pressure and forex volatility in emerging markets is ‘posing serious concerns, but at the same time, as the collective leadership of the international community has been able to address the problems (that) arose out of 2008 crisis, we will be able to overcome this current crisis,’ ensuring that India’s growth will be 8% plus.

On the recent devaluation of rupee, he said the Reserve Bank of India is watching the situation. ‘The RBI Governor has made it quite clear that as and when the situation warrants, the RBI will intervene. Right now, there is no such situation.’ Pranab Mukherjee will be visiting Washington for the IMF and World Bank’s annual meeting and he will also be meeting leaders from the BRICS (Brazil, Russia India, China and South Africa) nations, where the nations would review the global condition and try to work out a common approach to issues that be debated in the IMF-World Bank meeting.

‘We will also discuss our strategy in respect of the Euro zone crisis,” by adding further he said the BRIC leaders would exchange views and these will be reflected in a communiqué that is currently being drafted.

Afterward, at USIBC-FICCI Round Table Meeting Finance Minister said no country has remained immune to the fallout of the global financial crisis in 2008. Though the economic downturn was moderated and growth resumed in the second half of 2009 in most economies, the pace of recovery remained uneven.  Advanced economies grew more slowly than before, while fast emerging economies like India and China showed the way for the rest of the world.

The S&P CNX Nifty opened at 4,873.75; about 50 points lower compared to its previous closing of 4,923.65, and has touched a high and a low of 4,889.40 and 4,847.15 respectively.

The index is currently trading at 4,858.30, down by 65.35 points or 1.33%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were TCS up by 1.52%, HCL Tech up by 1.50%, Infosys up by 1.08%, HUL up by 0.93% and Wipro up by 0.78%.

On the other hand, Tata Motors down by 4.43%, Sterlite Industries down by 4.37%, Axis Bank down by 3.75%, Cairn down by 3.62% and SAIL was down by 3.53%, were the major losers on the index.

All the Asian counterparts barring Jakarta Composite were trading in the red; Shanghai Composite was down 22.12 points or 0.91% to 2,420.94, Hang Seng was down 301.30 points or 1.68% to 17,610.65, KLSE Composite was down 15.44 points or 1.11% to 1,372.37, Straits Times was down 35.89 points or 1.32% to 2,684.64, Seoul Composite was down 73.70 points or 4.09% to 1,726.85 and Taiwan Weighted was down by 220.56 points or 3.02% to 7,084.94.

On the flip side, Jakarta Composite was up by 25.61 points or 0.76% to 3,394.76, remained the lone gainer among the Asian peers.