Markets slip into the red; broader indices bleed

Markets came under pressure on reports of some margin call, as wary investors were selling stocks. However, some support emerged at lower levels, limiting the further downside of the bourses. Still gyrating in red, Sensex is trading above 19300 level, while 50 share index, Nifty, is nearing the 5850 mark. However, the cuts are broad and deep in broader indices, which are trading lower by over a percent. On the global front, Asian shares edged higher on Monday but gains were capped by uncertainty in the global economy after a private survey showed Chinese manufacturing activity retreated from two-year highs this month. Closer home, Realty, Consumer Durables and Oil & Gas counters are the worst hit. However, uptrend of Information Technology and Auto stocks are providing some solace to ailing equity markets, which otherwise seem to be jittery on the first day of the budget week. However, NBFC stocks, bucking the trend, have hogged limelight after the RBI issued guidelines allowing any business sector to apply for banking licenses. The overall market breadth remains in the favour of declines which have thumped advances in the ratio of 1585:881, while 115 shares remained unchanged.

The BSE Sensex is currently trading at 19306.39, down by 10.62 points or 0.05% after trading in a range of 19382.89 and 19262.02. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading in the red; the BSE Mid cap and Small cap indices were down by 1.46% and 1.29% respectively.

The few gaining sectoral indices on the BSE were, IT up by 1.53%, TECk up by 98%, Auto up by 0.45%. While Consumer Durables down by 2.38%, Realty down by 2.34%, Capital Goods down by 1.35%, Metal down by 1.31% and Oil and Gas down by 1.31% were the losers on the BSE.

The top gainers on the Sensex were, Infosys up by 2.45%, Tata Motors up by 1.74%, TCS up by 0.86%, Wipro up by 0.71% and SBI up by 0.48%

On the flip side, Cipla down by 2.06%, ONGC down by 2.02%, Coal India down by 2.00%, Sterlite Industries down by 1.44% and L&T down by 1.40%, were the top losers on the Sensex.

Meanwhile, giving relief to the loss-making banks, the government has exempted merger and takeover plans for loss-making and failing banks from the purview of fair trade regulator Competition Commission of India (CCI) for a period of five years.

All Mergers & Acquisitions (M&A) deals, happening in the country have to get clearance from the CCI, which keeps a tab on anti-competitive practices across sectors. CCI comes under the administrative control of the Corporate Affairs Ministry. Earlier, in December, Finance Minister P Chidambaram had said in the Parliament that Reserve Bank of India (RBI) would regulate the banking sector while CCI would look into competition practices in the banking sector.

However, CCI, in its pre-budget memorandum, has asked the government to extend tax benefits pertaining to M&As to all businesses including IT, telecom, sports and entertainment. M&A tax benefits are currently limited only to industrial undertakings and select services such as aircraft, shipping, hotels, and banking.  As per CCI, this move will help the industry restructure and reorganize operations with the rapidity of changes taking place in the business environment as well as to deal with the emergence of new sectors and segments.  

The CNX Nifty is currently trading at 5,839.45 down by 10.85 points or 0.19% after trading in a range of 5,874.25 and 5,830.90. There were 166 stocks advancing against 34 declines and one remains unchanged on the index.

The top gainers of the Nifty were Ranbaxy up by 2.90%, Infosys up by 2.30%, Tata Motors up by 1.95%, Power Grid up by 1.79% and HCL Tech up by 1.16%.

On the flip side, BPCL down by 3.39%, DLF down by 3.02%, JP Associates down by 2.42%, Cipla down by 2.09% and ONGC down by 2.07% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 0.50%, Hang Seng increased by 0.25%, Jakarta Composite jumped 0.78, KLSE Composite added 0.23%, Nikkei 225 surged 2.43% and Straits Times was up by 0.09%.

On the flip side, KOSPI Composite declined by 0.46% and Taiwan Weighted was down by 0.49%.