Benchmarks continue to languish in red; Nifty gyrates sub 5,700 level

Benchmark equity indices continue to languish in red, with no recovery in sight. Further with European markets too starting the session on a negative note, markets could further capitulate to selling pressure, given the sluggish trend of Asian counterparts. On the global front, European shares sold off again on Thursday with banks and commodity stocks, sectors most exposed to the broader economic fortunes, the top fallers on concerns about stimulus unwinding and Greek political turbulence. Meanwhile, Japanese stocks plunged over 6 percent to bear market territory and Asian shares slid to nine-month lows on Thursday, as investors rushed for the exits as the prospect of reduced stimulus from central banks roiled markets.

Closer home, benchmark 30 and 50 share index, Sensex and Nifty, trading with cut of over a percent have kept their head below the psychological 18,900 and 5,700 levels respectively on account of across the board selling pressure. With most of the sectoral indices trading in red on BSE sectoral front, only stocks from Consumer Durable pivotal have managed to keep their head above the water in green. Prominent losers amongst the space are stocks from Auto, PSU and FMCG space. The sentiment at D-street dampened after Finance Minister desisted from announcing any announcement to stem rupee fall. Nevertheless, in a bit of positive, government revised April IIP figure to 2.2% against 2% reported earlier. The overall market breadth on BSE is in favour of declines, which have thumped advances in the ratio of 1405:589, while 130 shares remain unchanged.

The BSE Sensex is currently trading at 18,810.80, down by 230.33 points or 1.21% after trading in a range of 18,914.13 and 18,765.53. There were 6 stocks advancing against 24 declines on the index.

The broader indices continued to languish in red; the BSE Mid cap and Small cap indexes were trading lower by 1.07% and 0.81% respectively.

The sole gaining sectoral indices on the BSE was, Consumer Durables up 1.71% while Auto down by 2.25%, PSU down by 1.56% FMCG down by 1.52%, IT down by 1.50% and Health Care down by 1.41% were the top losers on the BSE.

The top gainers on the Sensex were Hindalco Industries up by 3.90%, Bharti Airtel up by 2.66%, Tata Steel up by 1.15%, SBI up by 0.50% and Hero MotoCorp up by 0.28%.

On the flip side, Tata Motors down by 3.53%, Sun Pharma was down by 3.33%, Maruti Suzuki was down by 2.61%, Bajaj Auto down by 2.52% and Wipro down by 2.50% were the top losers on the Sensex.

Meanwhile, in order to enhance foreign investment in India, a SEBI panel, headed by former cabinet secretary KM Chandrasekhara, has suggested for simplifying the rules by removing the norm of direct registration of foreign institutional investors with SEBI and reducing the KYC process for well-regulated entities.

Further, the committee also proposed to keep the aggregate investment limit for Foreign Portfolio Investments (FPI) at 24 per cent. Further, it has proposed to split FPIs into three categories. Among these categories, category I includes low risk (central banks, sovereign wealth funds),  category II - moderate risk (regulated entities such as banks, asset management companies, broad based funds already registered with SEBI) and category III - high risk and has kept the KYC formalities minimal compared to the first two categories. On easing the process for FPIs the committee said that prior registration of FIIs and sub-accounts with SEBI will not be required.  

Meanwhile, the recommendations also sit well with a parallel committee Rationalisation of Investment Routes and Monitoring of Foreign Portfolio Investments (RIRMFPI) set up by the finance ministry to examine the larger issue of reducing the differential between FII and FDI as well as reviewing entry norms for foreign investors. Earlier, it has suggested merging FIIs, sub accounts and Qualified Foreign Investors (QFI) into one class, as foreign portfolio investors (FPI). However, the committee has, recommended that NRIs and foreign venture capital investors should be treated separately from the omnibus definition.

The CNX Nifty is currently trading at 5,695.95 down by 64.25 points or 1.12% after trading in a range of 5,729.85 and 5,683.10. There were 8 stocks advancing against 42 declines on the index and one remains unchanged.

The top gainers of the Nifty were Hindalco up by 3.74%, Bharti Airtel up by 2.97%, Tata Steel up by 0.82%, Axis Bank up by 0.73% and Dr Reddy’s up by 0.55%.

On the flip side, Tata Motors down by 3.75%, PNB down by 3.67%, Bank of Baroda down by 3.54%, Sun Pharmaceuticals down by 3.22% and Maruti Suzuki down by 2.64% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite slumped 2.88%, Hang Seng tumbled 2.80%, Jakarta Composite declined 0.69%, KLSE Composite dropped 1.39%, Nikkei 225 crumbled 6.35%, Straits Times decreased 1.28%, KOSPI Composite contracted 1.42% and Taiwan Weighted was down by 2.03%. 

European markets got off to a negative start; with CAC 40 plummeted by 1.61%, DAX dropping 0.96% and  FTSE 100 plunged by 1.21%.