Benchmarks magnify losses; Sensex slips sub 19k level

Benchmark equity indices, after starting the session on negative note, have added some more losses on account of sustained selling pressure by funds and speculators amidst a mixed Asian trend. Sentiments were further deterred after growth in India's services sector eased last month to its slowest since October 2011 as order books filled at a slower pace. The HSBC services Purchasing Managers' Index, based on a survey of around 400 companies, fell to a 17-month low of 51.4 in March from 54.2 in February. However, the losses at D-street were capped by encouraging statement of country’s Prime Minister, Manmohan Singh, who said that growth figure of 8% could yet again be achieved for the country and that India’s growth slump is temporary in nature. Although off low’s, benchmark 30 share index, Sensex, was trading with loss of over 50 points, below its crucial 19000 level. Similarly, widely followed index, Nifty, too trading lower by 15 points, was oscillating sub 5750 mark. Meanwhile, broader indices outperforming frontline equity indices for third consecutive session were trading with gains of over 0.30% (Midcap Index) and 0.50% (Smallcap index). Sectorally, Auto, Technology and Fast Moving Consumer Goods (FMCG) were the weak pockets of trade, while, Power, Healthcare and Bankex counters, were capping the down trend.

On the global front, Asia pacific shares were trading mixed on Wednesday as investors waited for news on the U.S. economy, while Japanese stocks rose and the dollar recovered against the yen on expectations of forceful monetary easing emerging from this week's Bank of Japan policy meeting. However, sentiment to some extent was bolstered after official purchasing managers' index (PMI) for the non-manufacturing sector rose to 55.6 in March from 54.5 in February.

Back home, the BSE Sensex is currently trading at 18987.86, down by 53.09 points or 0.28% after trading in a range of 19035.20 and 18947.37. There were 11 stocks advancing against 19 declines on the index. The market breadth was favoring positive trend; there were 1385 shares on the gaining side against 778 shares on the losing side while 89 shares remain unchanged.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.35% and 0.62% respectively.

The top gaining sectoral indices on the BSE were Power up by 1.81%, Health Care up by 0.92%, Bankex up by 0.16%, Capital Goods up by 0.02% and PSU up by 0.01% while, Auto down by 0.89%, Teck down by 0.66%, FMCG down by 0.54%, IT down by 0.42% and Consumer Durables down by 0.31% were the top losers on the BSE.

The top gainers on the Sensex were Tata Power up by 5.30%, Sun Pharma up by 2.56%, BHEL up by 1.84%, Cipla up by 1.21% and Jindal Steel up by 1.01%.

On the flip side, Bharti Airtel was down by 3.29%, Bajaj Auto was down by 1.90%, Tata Motors was down by 1.61%, Hindustan Unilever was down by 1.40%, HDFC was down by 1.22% were the top losers on the Sensex.

Meanwhile, In order to remove the ambiguity in foreign investments, the finance ministry has notified an eight-member panel under Economic Affairs Secretary Arvind Mayaram for giving clear definitions to FDI and FII. Other members of the panel include the DIPP Secretary, the RBI Deputy Governor H R Khan and SEBI Member S Raman.  

This committee is constituted in accordance with the budget announcement, to examine and work out the details of the application of the principle followed internationally for defining FDI and FII. The government in FY14 Budget had proposed to follow the international practice with regard to defining FDI and FII to remove the ambiguity in making distinction between the two types of investments.

Presently, foreign investment of 10 percent or less in a company is treated as FII and if more than 10 percent, the investment is treated as FDI. India is getting $50 billion foreign investment every year and during the year 2012 India has received $22.8 billion through FDI alone. India receives maximum FDI from Mauritius, followed by Japan, Singapore, the Netherlands and the UK.

Foreign investment is considered crucial for economic development of a country and to attract maximum foreign investment into the country, the government has been liberalizing the foreign investment policy. Moreover, the finance minister had visited several major financial markets like Germany, Canada, Singapore, Hong Kong, and the UK to sell India’s growth story.

The CNX Nifty is currently trading at 5,731.90 down by 16.20 points or 0.28% after trading in a range of 5,743.85 and 5,720.50. There were 17 stocks advancing against 33 declines on the index.

The top gainers of the Nifty were Tata Power up by 5.30%, Sun Pharmaceuticals up by 2.58%, BHEL up by 1.84%, Cipla up by 1.19% and ICICI Bank up by 0.96%.

On the flip side, Bharti Airtel down by 3.29%, Bajaj-Auto down by 1.76%, Tata Motors down by 1.74%, Bank of Baroda down by 1.66% and Hindustan Unilever down by 1.52% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite up by 0.03%, Jakarta Composite up by 0.24%, Straits Times up by 0.10%, Taiwan Weighted up by 0.26% and Nikkei 225 was up by 2.51%.

On the flip side, Hang Seng down by 0.02%, KLSE Composite down by 0.83%, and KOSPI Composite was down by 0.22%.