Benchmarks witness chaos for fifth consecutive day; Nifty hits fresh 2013 lows

The carnage at Indian stock markets prolonged for yet another session as the benchmarks continued to sway to the tune of depressing global developments and deposed another half a percentage point on Thursday. Though, markets after an initial downfall traded firmly through morning session recapturing their crucial 19,000 (Sensex) and 5,800 (Nifty) levels on the back of energetic cues from US and some of the Asian equity indices. However, the key gauges suffered a setback in the last leg of trade as sudden bouts of profit booking emerged in the local markets following the somberness prevailing in European markets, post which the indices hit fresh 2013 lows, extending the sorrow of closing in the negative territory for fifth straight session.

European counters fell as investors, already jittery over Cyprus’ debt crisis, were confronted with data showing Germany’s business activity lost steam in March. The data, which suggested Europe’s largest economy would eke out meager growth this quarter, outweighed a pick-up in Chinese factory activity and a commitment by the US Federal Reserve towards its stimulus programme. Meanwhile, Asian markets after trading firmly for most part of the day ended mixed.

Back home, on the political front, President Pranab Mukherjee accepted the resignation of five Ministers belonging to DMK, which withdrew support to the UPA government on the Sri Lankan Tamils issue. Meanwhile, sentiments remained jittery after reports suggested Reserve Bank of India (RBI) initiating scrutiny of head offices and branches of ICICI Bank, HDFC Bank and Axis Bank, key accuse for money laundering, violation of regulations like Foreign Exchange Management Act (FEMA) and know your customer (KYC). Moreover, fears over the government being forced to call early elections or see its reform agenda weakening after a key ally withdrew from the ruling coalition this week, also weighed on investors’ sentiment.

Sentiments also remained under pressure as stocks of power space hit rock bottom despite news that India is likely to see additional installation of 1300 MW to 1400 MW of solar power this year. Bucking the trend, shares of software and technology counters went through the roof after the US Federal Reserve at the end of the two-day monetary policy meeting on March 20, 2012, said it will keep up its bond buying to stimulate the US economy.

The NSE’s 50-share broadly followed index Nifty declined by thirty five points to end way below the psychological 5,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex tumbled by over ninety points to finish below the psychological 18,800 mark. Moreover, broader markets too witnessed blood-bath and ended the session with a cut of over one and a half per cent.

The overall volumes stood above Rs 2.80 lakh crore, which remained on the higher side as compared to that on Wednesday. The market breadth remained in favor of declines as there were 942 shares on the gaining side against 1,926 shares on the losing side while 119 shares remain unchanged.

Finally, the BSE Sensex lost 91.32 points or 0.48% to settle at 18,792.87, while the CNX Nifty declined by 35.65 points or 0.63% to end at 5,658.75.

The BSE Sensex touched a high and a low of 19,082.29 and 18,756.65, respectively. The BSE Mid cap index down by 1.07% and Small cap index was down by 1.23%.

The top gainers on the Sensex were, Bharti Airtel up by 5.99%, ICICI Bank up 3.35%, HDFC up 2.09%, Jindal Steel up 1.02% and Wipro up 0.99%, while Bajaj Auto down by 4.61%, Tata Motors down by 4.22%, Tata Power down by 4.06%, HDFC Bank down 3.14% and L&T down by 2.85% were the top losers on the index.

The top gainers on the BSE sectoral front were, Consumer Durables up 0.78%, TECk up 0.60% and IT up 0.27%, while Realty down by 2.91%, Power down 2.38%, Capital Goods down 2.30%, Auto down 2.23% and PSU down 1.19% were the top losers on the sectoral space.

Meanwhile, relieving apprehensions over the impact of the changing political scenario on policy reforms, Finance Minister P Chidambaram said there will be no let-up in the government's effort to continue with the economic reforms and it will go ahead for meetings with foreign investors to persuade them to invest in India. His statement came a day after key ally DMK withdrew support from the UPA Government over India’s stance on Sri Lanka at the United Nations.

Chidambaram said ‘it is true that one ally has withdrawn support. Still, the government enjoys majority and will continue to do its duty. The government will continue to take executive action to push legislation in Parliament.’  By adding further, he said that the government will not waiver in its commitment to bring down the fiscal deficit to 4.8% in 2013-14 from 5.2% estimated in the current financial year.

To convince investors to invest in India, Chidambaram is scheduled to meet foreign investors in major financial hubs like Japan, UAE, Canada and the United States in the coming weeks. The government is also planning to push through key economic reform Bills in areas such as insurance, pension and corporate law in the ongoing Budget Session. The first part of the session will end on March 22, and the House will re-assemble on April 22.

However, the government lacks numbers in Rajya Sabha after the withdrawal of support by DMK. With this, the government may have a tough time in taking up key legislations in the Lok Sabha, as well.

The CNX Nifty touched a high and a low of 5,757.75 and 5,647.95 respectively. 

The top gainers on the Nifty were, Bharti Airtel up by 6.05%, ICICI Bank up 3.07%, HDFC up 2.15%, M&M up 1.45% and Ultra Tech Cement up by 1.36%.

On the flip side, the top losers of the index were, Reliance Infra down by 6.56%, JP Associates down by 6.44%, Bank of Baroda down by 4.89%, Tata Power down by 4.37% and Tata Motors down by 4.24%.

The European markets were trading in red, France’s CAC 40 down by 1.06%, Germany’s DAX down by 0.85% and the United Kingdom’s FTSE 100 down by 0.73%.

Asian markets ended mixed on Thursday as Chinese Shanghai Composite closed higher after China manufacturing PMI rose to 51.7 in March, from 50.4 in February, which also gave a brief lift to Hong Kong stocks, the Hang Seng Index ended flat in negative territory. South Korea’s Kospi went home with red mark on headlines of more tension with North Korea. Japanese stocks closed higher, supported by expectations of aggressive easing steps from the Bank of Japan under a newly installed management team.