Markets extend losing streak on weak global cues

Indian markets continued reeling in red on Monday and benchmarks going downwards lost their other crucial support levels of 5,950 (Nifty) and 19,650 (Sensex), though global cues played major part but the weak economic data from the domestic front mainly added to the woes of the traders in trade for the day. While, the markets were still to recover from the decade low GDP number setback, the manufacturing growth slowed to its lowest since March 2009 and the HSBC Purchasing Managers’ Index stood at 50.1 in May against its previous reading of 51.1 in April.

Though, the start of the day was in green for the domestic markets and there was some sign of recovery after the big sell-off in last session, but things returned to their old track in the very initial hour of trade tailing the weakness in the global markets. After the plunge in the last session of the US markets, the Asian indices too followed the suit and majority of them traded lower for the day led by Japanese market, which lost around another 4 percent for the day. The Chinese markets that looked weathering the negative trend, too lost its momentum in the last and closed flat with negative bias on reports that showed slowing manufacturing in small companies. Further the European markets too, extending their decline made a soft start and pressured the domestic markets.

Back home, the market participants remained deeply concerned about the faltering economic growth and the despair of recovery in near term. On the same time rupee continued its depreciating run for yet another day despite the weakness in dollar overseas. Traders were concerned that government's efforts to promote India as an investment destination was not that effective, as the FDI inflows registered 38 percent decline to $22.42 billion in 2012-13 compared to the previous year. Sectorally apart from IT and Tech there was some late hour recovery in the realty and metal stocks, otherwise all others ended in red.

There was jubilation seen in the IT major Infosys counter after the company recalled founder and former chairman N R Narayana Murthy to act as executive chairman for a period of five years. He replaces current chairman K V Kamath, who will become lead independent director. The spillover impact was seen on other IT stocks and they remained the few gainers of the day. On the other hand, the oil and gas counter remained the major drag of the trading session, PSU OMCs despite hiking the petrol and diesel prices closed mostly in red. There was some buzz in the credit rating counters after McGraw Hill, which owns 52.77 percent of credit rating and research company CRISIL, announced to acquire another 22.23 percent stake, through the open offer. CRISIL was locked in upper circuit limit of 20 percent, while the other rating agency ICRA moved higher by over 13 percent.

Finally, the BSE Sensex lost 149.82 points or 0.76% to settle at 19,610.48, while the CNX Nifty declined by 46.65 points or 0.78% to end at 5,939.30.

The BSE Sensex touched a high and a low of 19,860.19 and 19,541.97, respectively. The BSE Mid cap index up by 0.26% and Small cap index was down by 0.12%.

The top gainers on the Sensex were, Infosys up by 4.42%, Jindal Steel up by 2.25%, Tata Steel up 1.64%, GAIL India up 1.42% and SBI up by 1.07%, while Hero MotoCorp down by 3.65%, Bajaj Auto down 3.32%, ONGC down 2.85%, Sun Pharma down 2.68% and HDFC down by 2.40% were the top losers on the index. 

The top gainers on the BSE Sectoral space were TECk up 1.11%, IT up 1.01%, Metal up 0.38% and Realty up 0.33%, while Oil & Gas down 1.84%, Power down 1.02%, Consumer Durables down 0.99%, Capital Goods down 0.99% and Auto down 0.84% were the top losers on the sectoral space.

Meanwhile, the Financial Stability and Development Council (FSDC) panel is likely to discuss on a range of issues relating to the financial sector development and stability, which includes issues relating to inter-regulatory coordination. The panel would also discuss issues like asset quality of banks and fraudulent investment scheme.

The FSDC’s sub-committee, headed by RBI Governor D Subbarao, would also consider the views of other sector regulators including Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and Pension Fund Regulatory and Development Authority (PFRDA).

The agenda for the meeting include rising NPA in the banking sector and restructuring of loans. The gross NPAs of PSU banks have risen to Rs 1.55 lakh crore as on December 2012 from Rs 71,080 crore as on March 2011, in which corporate accounts constitute 53.68 percent. Further, about 172 corporate accounts constitute NPAs of more than Rs 100 crore each at the end of December 2012 and the amount involved in such cases is to the tune of Rs 37,194 crore.

Recently, concerned over the rising NPAs of Indian banks, the Reserve Bank of India (RBI) has tightened rules for restructuring of most types of loans in line with global practices. The central bank has also directed the banks to disclose details of all capital instruments issued at least on a half-yearly basis along with financial earnings report to meet the Basel III requirement to provide a description of the main features of capital instruments.

The CNX Nifty touched a high and a low of 6,011.00 and 5,916.35 respectively. 

The top gainers on the Nifty were Infosys up by 4.00%, Lupin up 2.35%, Reliance Infra up 2.26%, Jindal Steel up 2.13% and Tata Steel up by 1.97%.

On the flip side, the top losers of the index were, ONGC down 3.51%, Asian Paint down 3.42%, Bajaj Auto down 3.32%, Hero MotoCorp down 3.30% and Ranbaxy down by 3.29%.

The European markets were trading mixed, France’s CAC 40 up by 0.29%, Germany’s DAX down by 0.26% and the United Kingdom’s FTSE 100 down by 1.39%.

Asian markets went home with red mark on Monday as investors booked profit from recent highs in the face of uncertainty over how long the current US stimulus will continue. Chinese market ended lower as China's factory activity contracted for the first time in seven months in May due to decline in domestic and external demand, while services sector activity also fell, indicating slowing momentum in the world's second-largest economy. Japan’s Nikkei closed lower led by a sharply weaker yen. The Jakarta Composite closed the shutter in negative territory, dragged by agriculture and property sectors that fell more than 3% each.