Selling pressure at Dalal Street gets arrested

Selling pressure at Dalal Street has been arrested as the bourses if not recouping losses are not even enticing more of the pressure. Concerns over euro zone debt crisis after Greece said it would miss the target set by the IMF and EU mainly drove investor’s away from placing their bets on risky assets.  Meanwhile, gloomy global leads across the world too led to the Monday’s blues as after sedate close of Wall Street, the awful performance of the Asian markets is weighing on the investor’s sentiment. U.S stocks ended their worst quarter since the depths of the 2008 credit crisis, crippled by Europe's debt debacle, a U.S. credit downgrade and a sputtering global economy. Meanwhile, Asian stocks too fell, extending the regional benchmark index's biggest quarterly decline in three years, after US consumer spending slowed as incomes unexpectedly dropped.  The purchases rose 0.2 percent after a 0.7 percent increase in July, Commerce Department figures showed on Sept. 30. Meanwhile, incomes decreased 0.1 percent, the first decline since October 2009. The US future indices too were showing a downtick in the screen trade. Back home, not one counter on the BSE sectoral front was spared, however, stocks from Realty, Metal and Bankex space featured in the list of worst performer. The 30 scrip sensitive barometer index on Bombay Stock Exchange (BSE) -Sensex- down with huge 300 points was trading near the 16100 level. Meanwhile, the broadly followed 50 share index- Nifty-surrendering over 100 points was trading  sub 4900 mark. The broader indices too were down and out with serious wounds. The overall market breadth on BSE was in the favour of declines which outpaced advances in the ratio of 1542:667, while 80 shares remained unchanged.

The BSE Sensex is currently trading at 16,132.00, down by 321.76 points or 1.96%. The index has touched a high and low of 16255.97 and 16088.98 respectively. There were just 3 stocks advancing against 27 declines on the index.

The broader indices too were down with intense cuts; the BSE Mid cap and Small cap indices were down by 1.50% and 1.08% respectively.

Selling was witnessed across the board, however, stock from Realty down by 3.67%, Metal down by 3.54%, Bankex down by 2.72%, CD down by 1.93% and CG down by 1.87% counters on the BSE Sectoral front featured in the list of worst performers.

M&M up by 0.93% and Maruti Suzuki up by 0.92% remained the only gainers on the index, while, Jindal Steel down by 4.67%, DLF down by 4.25%, Tata Steel down by 4.05%, Hindalco down by 3.92% and ICICI Bank down by 3.63% were the top losers on the index.

Meanwhile, the Indian government is considering opening fully its single-brand retail sector to foreign direct investments, and the foreign companies will be allowed to completely own single-brand retail stores in the country. At present, India allows 51% foreign direct investment (FDI) in single-brand retail and 100% in wholesale operations. Though, the move to raise the FDI limit in singlebrand retail is being accompanied with tightening of norms for the sector. In its update of the FDI policy issued on September 30, the government has mandated that the foreign investor must own the brand that it intends to retail in India. This is to ensure that franchisees of brands do not take advantage of a more liberal investment regime.

The government had long been considering to allow foreign firms such as global retail giant Wal-Mart to invest in supermarkets, but lack of political consensus and concerns of small-shop owners have so far prevented the move. These global retail chains such as Walmart, Tesco and Carrefour see India’s 1.2 billion population as one of the world’s last largely untapped markets and have been impatiently waiting for several years to open stores in India and earlier this year a committee of secretaries had endorsed a proposal to allow 51% FDI in multi-brand retail. But the proposal has not gone to the Union Cabinet because of differences within and possibility of political opposition.

Meanwhile, it is being said that in the absence of supermarket reform, the government is considering to free up the single brand sector to send a positive signal about the country’s investment climate. However, the industry secretary had last week dismissed talk the supermarket reform was on the backburner. 

The S&P CNX Nifty is currently trading at 4,846.40, down by 96.85 points or 1.96%. The index has touched a high and low of 4879.15 and 4833.50 respectively. There were just 9 stocks advancing against 41 declines on the index.

The gainers of the Nifty were Reliance Power up by 1.69%, Reliance Capital up by 1.54%, BPCL up by 1.50%, BHEL up by 1.25% and RCom up by 1.18%.

Jindal Steel down by 4.94%, DLF down by 4.52%, Tata Steel down by 4.47%, Hindalco down by 4.26% and Tata Power down by 3.86% were the major losers on the index.

All the Asian equity indices were trading in the red; Hang Seng down by 4.95%, Jakarta Composite down by 4.05%, KLSE Composite down by 2.05%, Nikkei 225 down by 2.21%, Straits Times down by 2.49% and Taiwan Weighted was down by 3.02%.

Stock markets in China remained closed on Monday in observance of a public holiday and the country's markets will be shut throughout the week for holidays. Also South Korea's markets were closed on account of a national holiday.