Indian equities sink deeper as selling intensifies post bleak European opening

Indian frontline equity indices suffered a setback in Monday afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. The benchmarks have receded to new lows in the session as they shaved off over two percentage points and breached 16,100 (Sensex) and 4,850 (Nifty) levels on the downside. Sentiments remained dismal as worries over global economic growth prospects prompted marketmen to take profits off the table amid little signs of supportive leads. Investors resorted to hefty position squaring on mounting worries that Greece is likely to default on its debt. Reports suggested that Greece failed to meet this year's deficit target of 7.8 percent, due to a deeper than expected recession and its deficit for 2011-2012 is expected to reach 8.5% of GDP, or $25.2 billion. On the domestic front, sentiments were undermined by the manufacturing PMI data which showed that India’s manufacturing activity expanded at the slowest pace in two and a half years, in the month of September as the non-stop rate hike by Indian central bank since March 2010 hit the growth of new orders. On the BSE sectoral space, the high beta - realty and Metal pockets remained among top laggards in the space as they got lacerated by over three and half a percent while sectors like rate sensitive Bankex and Capital Goods too got pounded heavily in the session. Though there were no sectoral gainers in the space, however, Anil Dhirubhai Ambani Group's stocks like Reliance Communications, Reliance Capital, R Power and Reliance Infrastructure climbed higher on short-covering after the recent brutal sell-off in those shares. The ADAG pack moved higher on reports that CBI has given a clean chit to ADAG group chief Anil Ambani on charges that they held shares in firms linked to Swan Telecom.

Moreover, the broader markets too got pummeled and traded with large cuts in afternoon trades but outclassed their larger peers. The bourses got pounded on weak volumes of over Rs 0.50 lakh core, considering this is the second trading session of a new F&O series while the market breadth on BSE was in favor of declines in the ratio of 1827:681 while 98 scrips remained unchanged.

The BSE Sensex is currently trading at 16,085.45 down by 368.31 points or 2.24% after trading as high as 16,255.97 and as low as 16,056.33. There were 2 stocks advancing against 28 declines on the index.

The broader indices were trading on a somber note; the BSE Mid cap index sank 1.99% and Small cap shed 1.47%.

On the BSE sectoral space, there were no gainers while Realty down 3.89%, Metal down 3.63%, Bankex down 2.96%, Capital Goods down 2.82% and IT down 1.96% were the major losers in the space.

M&M up 0.19% and Maruti Suzuki up 0.16% were the only gainers on the Sensex, while Jindal Steel down 5.47%, DLF down 5.17%, Hindalco down 4.46%, Wipro down 4.36% and Tata Steel down 4.24% ere the major losers on the index.

Meanwhile, Indian Coffee exports in 2010-11 crop year that ended on September 30 have made a remarkable achievement and for the first time breached the billion-dollar-mark in any crop year or financial year or calendar year. The coffee exports have increased 81 per cent in dollar terms to cross a billion to $1.046 billion against $577 million in the previous year. The growth was mainly driven by high prices in a weakening global economic environment and the incentives such as DEPB that boosted exports. The previous high was $798.78 million in financial year 2010-11.

In Rupee value terms, exports were up 74 per cent to Rs 4,788 crore against Rs 2,753 crore, while in volumes terms, coffee exports were up 33.2 per cent to 3.57 lakh tonnes (lt) against 2.68 lt in the previous year.

In the current financial year, exports from April till September grew 69 per cent to Rs 2,602 crore from Rs 1,537 crore in the corresponding last year.  In dollar terms, the growth was 76 per cent to $577 million from $327 million. In volumes, the exports for the first six months of current fiscal grew by a fourth to 1.91 (lt) from 1.53 (lt) in the previous year.

However, the exporters are concerned about the situation in Europe where the prospects remain bleak in view of the worsening financial crisis. Europe accounts for about 70 per cent of India's coffee exports, while Germany and the Russian Federation are the other two large markets.

The S&P CNX Nifty is currently trading at 4,837.30, lower by 105.93 points or 2.14% after trading as high as 4,879.15and as low as 4,823.90. There were 9 stocks advancing against 41 decline on the index.

The top gainers on the Nifty were BPCL up 3.274%, R Infra up 1.91%, R Capital up 1.71%, R Power up 1.24% and R Cop up 1.11%.

Jindal Steel down 5.61%, DLF down 5.44%, Wipro down 4.64%, Hindalco down 4.60% and Tata Steel down 4.36% were the major losers on the index.

Asian markets traded on a pessimistic note, Hang Seng got pulverized by 4.38%, Jakarta Composite got dragged by 4.95%, KLSE Composite plummeted 2.37%, Nikkei 225 plunged 1.78% and Straits Times sank 2.34% and Taiwan Weighted slumped 2.93%.

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.

The European markets traded on a bleak note as France’s CAC 40 plunged 2.90%, Germany's DAX sank 1.14% and Britain’s FTSE 100 descended 0.87%.