Markets extend early losses; Nifty below 5,800 level

Indian equity markets extended early losses in the late morning session on Tuesday on sustained selling across the counters. The Sensex was down by 285.09 points, while Nifty down 85.40 points. Investors were on selling spree ahead of the factory output and wholesale price data due later in the week, which will be the direction for central bank's review next week. Market sentiments were toned down with weak rupee and muted global cues. Rupee depreciated to a fresh record life-time low against greenback, making imports more costly, CAD worse and the struggling economy further vulnerable. Moreover, there were no visible signs of RBI intervention to arrest rupee slide, but the finance ministry tried to soothe frayed nerves with Economic Affairs Secretary Arvind Mayaram saying, if you see weakening of all currency vis-a-vis dollar, rupee is also not unaffected in that sense. On the sectoral front, all were trading lower. Metal stocks extended earlier day’s losses triggered by weak Chinese economic data released over the weekend, while cement companies will be in focus after the Supreme Court today admitted the appeals of several cement manufacturers against a Competition Appellate Tribunal (CAT) order.

On the global front, Asian markets were trading mostly lower on Tuesday in quiet trade after the previous day's rally, with Wall Street providing a lacklustre lead while eyes were on a Bank of Japan policy meeting. Back home, the market breadth was favoring negative trend; there were 383 shares on the gaining side against 1,492 shares on the losing side, while 107 shares remain unchanged.

The BSE Sensex is currently trading at 19,155.98, down by 285.09 points or 1.47% after trading in a range of 19,418.74 and 19,135.86. There were 4 stocks advancing against 26 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.76% and Small cap index was down by 1.88%.

There were no gaining sectoral indices on the BSE while Metal down by 4.72%, Realty down by 4.02%, Consumer Durables down by 2.60%, Power down by 1.94% and PSU down by 1.91% were the top losers on the BSE.

The top gainers on the Sensex were Cipla up by 0.62%, Hero MotoCorp up by 0.21%, Hindustan Unilever up by 0.21% and GAIL up by 0.20%.

On the flip side, Jindal Steel was down by 18.49%, Hindalco was down by 5.02%, Tata Steel was down by 3.79%, Sterlite Industries was down by 3.48% and ICICI Bank was down by 3.40% were the top losers on the Sensex.

Meanwhile, with a record fall in rupee value to a life-time low of over 58 against dollar, global buyers are putting pressure on exporters to offer discounts between 10 percent and 15 percent. As per the Federation of Indian Export Organizations (FIEO), continuous fall in domestic currency would not help exporters much and in the long term, the volatility will add to the instability and speculation affecting the business confidence of exporters.

Further, India Inc’s is of the view that falling currency beyond a point was not good for the economy and there is a need for strong reform measures. Recently, the rupee plunged to its life-time low of 58 against the dollar on account of high CAD, which widened due to rising gold import and high crude oil prices. Further, India's trade deficit in 2012-13 has touched an all time high of $190.91 billion compared to $183.4 in the previous fiscal. On the other hand, exports in 2012-13 declined 1.76% to $300.6 billion on account of slowdown in the global economy.

Regarding the rupee depreciation, the government said that there is an unwarranted panic in the market and will settle down in some time. Dollar is appreciating against all the currencies across the world and the rupee has not weakened as much as some of its peers, it added. The central bank also assured that it will do everything to turn down the volatility as the RBI has forex reserves of over $290 billion to deal with the situation on the external sector.

The CNX Nifty is currently trading at 5,792.60 down by 85.40 points or 1.45% after trading in a range of 5,868.05 and 5,792.35. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were HCL Tech up by 1.42%, Hero MotoCorp up by 0.82%, Cipla up by 0.57%, Kotak Bank up by 0.54% and GAIL up by 0.36%.

On the flip side, Jindal Steel down by 18.50%, DLF down by 5.48%, Hindalco down by 5.02%, Tata Steel down by 3.89% and Reliance Infra down by 3.53% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 0.96%, Jakarta Composite tumbled 2.57%, Nikkei 225 dropped 1.11%, Straits Times crumbled 0.83%, KOSPI Composite decreased 0.56% and Taiwan Weighted was down by 0.54%.

On the flip side, KLSE Composite was up 0.05%.

Markets in China remained closed for the trade on account of Dragon Boat Festival holiday.