Domestic indices trade with cut of around 1.50%; HDFC Bank drops over 5.50%

Domestic equity indices magnified their losses and were trading near low points of the day in late morning deals on account of hectic selling in banking industry related companies mainly HDFC Bank, ICICI Bank and Kotak Mahindra Bank. Sensex and Nifty were falling over 1000 and 299 points. Negative cues from the global markets weighed the domestic sentiments. Traders were also cautious as US Treasury yields rise. Tensions in the Middle East and dimming rate cut hopes by the US Fed accentuated investors' fears, especially after a sharp rally to record high levels.  Besides, broader indices outperformed their large peers with BSE Mid cap index and Small cap index falling in the range of 0.25-0.45%. On the BSE sectoral front, traders were seen pilling up position in IT, Capital Goods, TECK, Consumer Durables and Industrials, while selling was witnessed Bankex, Metal, Realty, Basic Materials and Auto. 

On the global front, Asian markets were trading in red following weak cues from the US markets overnight. Sentiments were weak after China’s fourth-quarter gross domestic product growth missed estimates. The country’s economy grew by 5.2% in the October to December period last year, China’s National Bureau of Statistics said, missing expectations of a 5.3% growth forecast by street. Back home, in the stock specific development, PTC Industries rallied after its subsidiary signed a pact with France-based Dassault Aviation to supply the latter with titanium cast parts for the Rafale Multirole fighter aircraft.

The BSE Sensex is currently trading at 72058.09, down by 1070.68 points or 1.46% after trading in a range of 71757.54 and 72484.80. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.43%, while Small cap index down by 0.27%.

The top gaining sectoral indices on the BSE were IT up by 0.67%, Capital Goods up by 0.49%, TECK up by 0.48%, Consumer Durables up by 0.38% and Industrials up by 0.33%, while Bankex down by 2.92%, Metal down by 1.28%, Realty down by 1.28%, Basic Materials down by 1.24% and Auto down by 1.00% were the top losing indices on BSE.

The top gainers on the Sensex were HCL up by 1.59%, Infosys up by 0.76%, Wipro up by 0.71%, Titan up by 0.69% and Larsen & Toubro up by 0.69%. On the flip side, HDFC Bank down by 6.55%, Kotak Mahindra Bank down by 2.58%, ICICI Bank down by 2.24%, Tata Steel down by 2.11% and Bajaj Finserv down by 1.81% were the top losers.

Meanwhile, RBI Monetary Policy Committee (MPC) member Jayanth R Varma has said that capacity utilization has been slowly increasing and private capital expenditure would pick up in the coming years. He noted that in the last couple of years, the government has shouldered the burden of investment, while private capital expenditure has been muted.

The MPC member has stated that at the same time, capacity utilization has been slowly creeping up and it is approaching levels that prompt the private sector to undertake capital expenditure at least in some sectors. Moreover, he said large public sector infrastructure investment of the recent years has the potential to crowd-in private sector investments. 

Asked whether India can escape the middle income trap, he said it is imperative that India makes this transition because failure would be extremely painful for the country's vast population. Moreover, he said the task is not easy as it would require a growth rate of 7-8 per cent sustained over many decades, and not many countries have done this successfully. Noting that India's democratic polity makes governments responsive to the needs and aspirations of its people, he said over the decades, India has created the capabilities both in private and public sector to surmount the obstacles that will surely arise in this path. 

The CNX Nifty is currently trading at 21732.60, down by 299.70 points or 1.36% after trading in a range of 21636.95 and 21851.50. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were HCL up by 1.58%, Larsen & Toubro up by 0.74%, Tata Consumer up by 0.73%, Wipro up by 0.73% and NTPC up by 0.71%. On the flip side, HDFC Bank down by 6.62%, Kotak Mahindra Bank down by 2.60%, ICICI Bank down by 2.31%, Tata Steel down by 2.15% and Grasim Industries down by 1.86% were the top losers.

All Asian markets were trading lower; Hang Seng declined 485.57 points or 3.16% to 15,380.35, Nikkei 225 slipped 26.07 points or 0.07% to 35,593.11, Taiwan Weighted lost 169.73 points or 0.99% to 17,177.14, Straits Times fell 25.91 points or 0.82% to 3,159.08, KOSPI dropped 60.07 points or 2.46% to 2,437.52, Shanghai Composite weakened 28.55 points or 1% to 2,865.44 and Jakarta Composite plunged 45.12 points or 0.63% to 7,197.67.