Benchmarks continue to trade lower amid weak global cues

Indian equity benchmarks are trading near their intraday lows in noon deals, amid weak global cues with Japanese Nikkei crashing over 7 per cent. Some disappointment also came in from currency front where Indian Rupee depreciated to its lowest level in over eight and a half months. The rupee fell below the key psychological level of 56, as the dollar rallied on worries about a potentially early end to US monetary stimulus.

Globally, European counters too made a gap down opening following a sell-off in Asian markets after China’s May HSBC flash PMI data shrank for the first time in seven months, in addition to concerns that the US Federal Reserve may stop its bond buying program. Japanese stock market tumbled by over 7 per cent, as surging Japanese bond yields and a strengthening yen contributed to the moves. Meanwhile, trading in Japan’s Nikkei 225 Futures was halted in Osaka briefly.

Back home, all the sectoral indices on the BSE were trading in red with realty, capital goods and power remained the top losers declining by 3-6 percent. Meanwhile, auto, banking and consumer durables too lost over two percent during the trade. The broader indices were bleeding badly by about two percent, while the market breadth on the BSE was negative; there were 428 shares on the gaining side against 1,619 shares on the losing side while 113 shares remain unchanged.

The BSE Sensex is currently trading at 19,759.07, down by 303.17 points or 1.51% after trading in a range of 20,027.56 and 19,697.44. There were 4 stocks advancing against 26 declines on the index.

The broader indices too declined further; the BSE Mid cap index and Small cap index were trading lower by 2.00% and 1.99% respectively.

There were no sectoral indices in green on the BSE, while Realty down by 5.95%, Capital Goods down by 3.84%, Power down by 3.56%, Bankex down by 2.34% and Consumer Durables down by 2.29% were the top losers.

The top gainers on the Sensex were ONGC up by 0.68%, TCS up by 0.31%, HDFC up by 0.18% and Sun Pharma up by 0.07%.

On the flip side, L&T down by 4.29%, Maruti Suzuki down by 3.88%, NTPC down by 3.85%, SBI down by 3.71% and BHEL down by 3.64% were the top losers on the Sensex.

Meanwhile, concerned over the existing Ponzi schemes in the market causing huge losses to common people, Finance Minister P Chidambaram said, there are regulatory gaps creating inefficiencies and asserted that efforts are being made to frame a new law to oversee financial sector. While addressing a seminar on the 'Indian Financial Code' (IFC), the minister said, these Ponzi schemes are cleverly designed to keep out of the purview of regulatory agencies and presently there is no regulator unambiguously in-charge over these schemes. 

By adding further, Chidambaram said that the present financial architecture has evolved over the years with a sequence of piecemeal measures and piecemeal legislations responding to immediate pressures from time to time and is not specifically comprehensively designed to meet some key financial objectives. Further, the multiplicity of regulators create gaps, ambiguity and regulatory overlap due to lack of role clarity and therefore creating inefficiencies in addressing critical emerging issues in an increasing dynamic, complex and interconnected financial world.

The finance minister has expressed need for tightening regulatory mechanism to deal with collective investment and Ponzi schemes and said that the implementation of the Financial Sector Legislative Reforms Commission (FSLRC) recommendations would require positive inputs from stakeholders. The FSLRC in its report had suggested that financial sector regulators such as SEBI as well as IRDA be merged into a Unified Financial Agency (UFA) and the role of RBI be restricted to regulating banks and managing monetary policy.

The CNX Nifty is currently trading at 5,987.55, down by 106.95 points or 1.75% after trading in a range of 6,081.45 and 5,972.40. There were 5 stocks advancing against 45 declines on the index.

The top gainers of the Nifty were ONGC up by 0.50%, UltraTech Cement up by 0.19%, Sun Pharmaceuticals up by 0.17%, TCS up by 0.10% and Hindustan Unilever up by 0.01%.

On the flip side, Ranbaxy down by 8.60%, JP Associate down by 7.83%, Rel Infra down by 7.48%, DLF down by 7.35% and L&T down by 4.29% were the major losers on the index.

All Asian equity indices were trading in red; Shanghai Composite was down by 1.10%, Hang Seng tumbled 2.59%, Jakarta Composite dropped 1.80%, KLSE Composite dipped 0.68%, Nikkei 225 crumbled 7.32%, Straits Times contracted 1.92%, KOSPI Composite declined 1.24% and Taiwan Weighted was down by 1.92%

The European markets were trading in red; France’s CAC 40 was down 1.86%, Germany’s DAX lost 2.05% and United Kingdom’s FTSE 100 edged lower by 1.68%.