Markets extend early losses; Sensex down 99 points

Indian equity markets extended losses in the late morning session on Wednesday with investors mostly treading cautiously, tracking weak global cues. The market sentiments got worsened after the industrial output for the month of April grew at a lower-than-expected 2%. Meanwhile, inflation based on the combined consumer price index (CPI) for urban and rural India eased to 9.31% in May 2013 from 9.39% in April 2013, another data released by the government showed. The S&P BSE Sensex was down 99.73 points, while Nifty down by 27 points. In currency market, Indian rupee recovered from earlier day’s record lows against dollar after RBI announced steps to check free-fall in rupee, raising the limit for online repatriation of export proceeds by over three-fold to $10,000. On the sectoral front, metal stocks extended losses for third day in a row on weak Chinese economic data released over the weekend. Though select stocks have found their way up into positive territory, largely due to some bargain hunting after recent heavy losses.

On the global front, Asian stocks were trading lower as Japanese machinery orders declined more than expected and concern grew that central banks from Tokyo to Washington are increasingly reluctant to add stimulus. Back home, the market breadth was favoring negative trend; there were 827 shares on the gaining side against 1,136 shares on the losing side, while 119 shares remain unchanged.

The BSE Sensex is currently trading at 19,043.27, down by 99.73 points or 0.52% after trading in a range of 19,135.20 and 19,013.41. There were 10 stocks advancing against 19 declines on the index and one remains unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.29% and Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 0.46%, Health Care up by 0.32% and Realty up by 0.11%, while Consumer Durables down by 6.09%, Metal down by 1.77%, FMCG down by 1.50%, Auto down by 1.14%, and PSU down by 0.42% were the top losers on the BSE.

The top gainers on the Sensex were Gail India up by 0.95%, ONGC up by 0.94%, HDFC Bank up by 0.88%, Infosys up by 0.65% and BHEL up by 0.61%.

On the flip side, Hero MotoCorp was down by 3.25%, Coal India was down by 3.11%, Bajaj Auto was down by 3.09%, Tata Steel was down by 2.31% and Hindalco was down by 2.27% were the top losers on the Sensex.

Meanwhile, in a move to check the rupee depreciation against dollar, the Reserve Bank of India (RBI) has increase the value per transaction from $3,000 to $10,000 for export related remittances received through OPGSPS (Online Payment Gateway Service Providers) and made it mandatory for units in Special Economic Zones (SEZ) to repatriate full value of exports within 12 months. The instructions have come into force with immediate effect.

The central bank announcement has come at a time, when the rupee has touched life time low of 58.98 against the US dollar. It has depreciated by 3.5 percent against dollar in the last two days and by over 8 percent since April 30.  

Regarding the Special Economic Zones (SEZ), the RBI said that the units located in SEZs shall realize and repatriate, full value of goods/software/services, to India within a period of twelve months from the date of export. SEZ is a geographical region that is designed to export goods and provide employment and possess special economic regulations that are different from other areas in the same country. Earlier, there was no time limit for realisation of exports made by units in SEZs.

Exports in April stood at $ 24.16 billion as against $23.7 billion in same month of 2012. While, India's total export in 2012-13 had totalled $300.6 billion, of which the SEZs accounted for Rs 4.76 lakh crore.  Presently, there are around 166 SEZ in operational and contributed about 30 percent to the country’s overall exports.

The CNX Nifty is currently trading at 5,761.35 down by 27.45 points or 0.47% after trading in a range of 5,789.95 and 5,751.65. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were IndusInd Bank up by 1.63%, DLF up by 1.50%, HCL Tech up by 1.29%, IDFC up by 1.18% and Ranbaxy up by 1.13%.

On the flip side, Coal India down by 3.38%, Hero MotoCorp down by 3.35%, Bajaj-Auto down by 3.20%, Axis Bank down by 2.68% and Tata Steel down by 2.26% were the major losers on the index.

All the Asian equity indices were trading in red; Jakarta Composite declined 1.29%, KLSE Composite dropped 0.57%, Nikkei 225 tumbled 0.23%, Straits Times slipped 0.32% and KOSPI Composite was down by 0.65%.

Markets in China, Hong Kong and Taiwan remained closed for the trade today.