Weak global cues drag benchmarks lower in early deals

Extending their southward journey for third consecutive day, Indian equity indices have made a gap down start and are trading below their crucial 5,750 (Nifty) and 18,900 (Sensex) levels tracking weak cues from global markets. The US markets extended their plunge in last session after failing to sustain an initial upward move, while all the Asian equity indices were trading with a massive cut of 1-5 per cent in Thursday’s morning deals with Japanese Nikkei declining over four and a half percent, dipping to levels seen before the central bank’s sweeping monetary policy stimulus in early April, as the yen rebounded, sending shares of exporters tumbling.

Back home, selling in rate sensitive counters like banking and auto also dampened the sentiments after high consumer price inflation dashed hopes of a rate cut by the central bank in its policy meet on June 17. However, losses remain capped up to certain extent as some encouragement came in with Fitch Ratings’ revision of India’s outlook to Stable from Negative and affirmation of ‘BBB-‘ rating. Fitch further said it expects the economy to recover modestly to 5.7% and 6.5% in FY14 and FY15 respectively. On the sectoral front, consumer durables and capital goods remained the top gainers, while auto, fast moving consumer goods and software remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE was positive; there were 375 shares on the gaining side against 882 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex opened at 18,897.49; about 143 points lower compared to its previous closing of 19,041.13, and has touched a high and a low of 18,905.46 and 18,815.57 respectively.

The index is currently trading at 18,896.34, down by 144.79 points or 0.76%. There were 6 stocks advancing against 24 declines on the index.

The overall market breadth has made a weak start with 28.11% stocks advancing against 66.12% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices up by 0.64% and 0.51% respectively. 

The only gaining sectoral indices on the BSE were, Consumer Durables up by 1.85% and Capital Goods up by 0.04%, while Auto down by 1.59%, FMCG down by 1.03%, IT down by 0.80%, PSU down by 0.68% and Metal down by 0.50% were the top losers on the sectoral index.

The top gainers on the Sensex were Bharti Airtel up by 2.32%, SBI up by 0.79%, Hindalco Industries up by 0.49%, Tata Power up by 0.31% and Dr Reddys Lab up by 0.26%.

On the flip side, Tata Motors was down by 2.52%, Wipro was down by 2.15%, Sun Pharma was down by 1.94%, Bajaj Auto was down by 1.67% and ITC was down by 1.64% were the top losers on the Sensex.

Meanwhile, in order to enhance FII inflow in Government’s debt, India is considering simplifying the allocations of government debt limits to foreign investors, including the current system of auctions. As the FII’s sell off has been a key reason behind the slump in the rupee to record lows this week, the government is likely to take measures to alter the foreign funds, which have sold over $3.2 billion in government debt for over 14 successive sessions. 

Government is expected to make the debt limits available on a first come, first serve basis for foreign investors, instead of the current system of selling them at monthly auctions. Further, to attract foreign investors into debt, the government has taken a slew of measures this year, including cutting taxes on interest income and raising the amount of debt they can buy. Meanwhile, India has already shifted to a first come first serve basis of selling corporate debt limits earlier this year.

The CNX Nifty opened at 5,895.00; about 50 points lower as compared to its previous closing of 5,760.20, and has touched a high and a low of 5,727.10 and 5,697.45 respectively.

The index is currently trading at 5,723.85, down by 36.35 points or 0.63%. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.39%, Ranbaxy up by 1.25%, Axis Bank up by 1.06%, SBI up by 1.03% and Tata Power up by 0.63%.

On the flip side, PNB down by 2.84%, Tata Motors down by 2.67%, Bank of Baroda down by 2.57%, Sun Pharmaceuticals down by 1.85% and Maruti Suzuki down by 1.77% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite slumped 68.09 points or 3.08% to 2,142.81, Hang Seng tumbled 572.49 points or 2.68% to 20,782.17, Jakarta Composite declined 78.17 points or 1.66% to 4,619.72, KLSE Composite dropped 19.50 points or 1.10% to 1,755.62, Nikkei 225 crumbled 600.37 points or 4.52% to 12,688.95, Straits Times decreased 47.14 points or 1.49% to 3,106.34, KOSPI Composite contracted 21.02 points or 1.10% to 1,888.89 and Taiwan Weighted was down by 128.17 points or 1.58% to 7,987.98.