Benchmarks resume the southward journey after a day of halt; rate sensitives weigh

Indian stock markets resumed their southward journey after a day of halt with both the frontline indices snapping the session below their crucial 5,900 (Nifty) and 19,450 (Sensex) levels. The downfall was transpired due to brutal selling in rate sensitive counters like, realty, banking and auto, ahead of the crucial mid-quarterly policy review of the RBI next week, as continuing inflationary pressure dampened the hope for rate cuts by the central bank. Though, markets traded in the green in most part of the morning session but, entered into negative trajectory after S&P said that the slowdown in India’s economic growth is less supportive for the country's sovereign credit ratings, and the government may find it challenging to meet the revenue projections of its 2013/14 budget. S&P rates India at ‘BBB-‘, one notch above junk, and had cut its outlook to ‘negative’ from ‘stable” last year, denoting a one-in-three possibility of a ratings downgrade.

Selling got intensified after nervous market participants’ resorted to ruthless across the board profit booking following the disappointing start of European stock markets. Though, Asian markets ended mixed. Some counters rebounded after three days of continuous decline as sentiment remained buoyed by new US data overnight. Seoul shares retreated on Friday, as Samsung Electronics slipped after the launch of its new smartphone, but losses were plugged by the rebound in auto shares which were buoyed by a weaker won.

Back home, cautiousness gripped the markets as the chief economic advisor Raghuram Rajan said that it was too early to say that the economy had recovered despite the improvement in some key numbers. Selling in banking stocks too dampened the sentiments, as stocks like ICICI Bank, HDFC Bank, SBI, Axis Bank, Indusind Bank, Bank of Baroda and Yes Bank all edged lower following accusations of money laundering. The news portal Cobrapost played the contents of purported video recording of officials of HDFC Bank, ICICI and Axis Bank allegedly agreeing to receive unverified sums of cash and putting them in their investment schemes and benami accounts in violation of anti-money laundering laws. However, the losses remained capped upto certain extent as some buying was witnessed in software pack as stock like Tech Mahindra, HCL Technologies, Wipro and Infosys edged higher on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Rally in public sector oil marketing companies too capped the downfall. Stocks like BPCL, HPCL and IOC all edged higher on reports diesel price may be hiked by 40-50 paisa a litre from 15-16 March 2013.

The NSE’s 50-share broadly followed index Nifty lost about forty points to end below its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex- tumbled by over one hundred and forty points to finish below its psychological 19,450 mark. Moreover, the broader markets too butchered during the trade and ended the session with a cut of three fourth of a percent.

Finally, the BSE Sensex lost 142.88 points or 0.73% to settle at 19427.56, while the CNX Nifty declined by 36.35 points or 0.62% to end at 5,872.60.

The BSE Sensex touched a high and a low of 19673.16 and 19383.13, respectively. The BSE Mid cap index down by 0.62% and Small cap index was down by 0.84%.

The top gainers on the Sensex were, Mahindra & Mahindra up by 1.48%, Tata Power up 1.19%, Hero MotoCorp up 0.73%, Wipro up 0.57% and Hindustan Unilever up 0.49%, while ICICI Bank down by 3.93%, Tata Motors down by 3.27%, Gail India down by 2.60%, Reliance down 1.96% and HDFC Bank down by 1.67% were the top losers on the index.

On the BSE Sectoral front, Consumer Durables up by 2.49%, IT up by 0.25%, TECk up by 0.02% and FMCG up by 0.05 points, were the top gainers, while Realty down by 2.81%, Bankex down 1.67%, Oil & Gas down 1.18%, Auto down 0.80% and Capital Goods down 0.59% were the top losers in the space.

Meanwhile, Finance Minister P. Chidambaram has said that the direct benefit transfer (DBT) scheme is the best way to transfer money directly to poor and will be implemented across the country by end of the year. Chidambaram stressed that the country has potential to implement the scheme successfully and urged the state governments to make contribution for the proper implementation of this scheme.

The primary aim of this Direct Benefit Transfer program is to bring transparency and terminate corruption from distribution of funds sponsored by the government. In DBT, benefit or subsidy will be directly transferred to the citizens living below poverty line and curbing the subsidy to those who don't require it.

The government launched its ambitious DBT programme on January 1 this year. The welfare plan was initially rolled out in 20 districts and covered seven schemes, mostly scholarships, and is likely to have benefited more than 2 lakh people. A total of 43 districts in 16 states have been identifying for the first round of DBT that will cover 26 social welfare schemes.

The CNX Nifty touched a high and a low of 5,945.65 and 5,861.00 respectively. 

The top gainers on the Nifty were, Siemens up by 6.15%, Asian Paints up 2.52%, Lupin up 1.92%, Ranbaxy up 1.70% and M&M up by 1.49%.

On the flip side, the top losers of the index were, DLF down by 4.44%, ICICI Bank down by 3.72%, Tata Motors down by 3.24%, GAIL down by 2.90% and JP Associates down by 2.81%.

The European markets were trading mixed, France’s CAC 40 down by 0.62%, Germany’s DAX up by 0.03% and the United Kingdom’s FTSE 100 down by 0.30%.

Asian shares ended mixed on Friday some of the markets rebounded from last three sessions of losses as fresh data from US showed a recovery in the world's largest economy, boosting investors' risk appetite. Japan's Nikkei went home with strong gains being regional outperformer, after the parliament approved Haruhiko Kuroda as the next governor of the Bank of Japan and his two new deputies. Meanwhile, South Korean market closed lower, as heavyweight Samsung Electronics slipped after the launch of its new smartphone.