Benchmarks make gap-down opening on feeble global cues

Pressurized by feeble global cues, Indian equity benchmarks have made a gap-down opening with frontline indices tumbling below their crucial 5,700 (Nifty) and 18,900 (Sensex) levels. The US markets suffered severe jolt in last session and all the major indices slumped by over a percent in a negative reaction to the Federal Reserve’s monetary policy announcement where Chairman Ben Bernanke suggested the US central bank could begin scaling back bond-buying program later this year, while all the Asian equity indices were trading in negative terrain with Shanghai Composite declining by about one and a half percent after the ‘flash’ HSBC China Purchasing Managers’ Index contracted further to 48.3 in June from May’s final reading of 49.2, hitting its weakest level since September as new orders faltered, reinforcing signs of tepid economic growth in the second quarter.

Back home, sentiments got clobbered after the rupee fell to a record low of 59.93 to the dollar, breaching past its all-time low of 58.98 on June 11. Cautiousness in the markets also prevailed on report that the foreign direct investment (FDI) in India has declined by six percent to $5.47 billion during January-March quarter of the current calendar year despite government’s various efforts to promote the country as an investment destination. Selling in Metal counter too dampened the sentiments as stocks like Hindalco, Jindal Steel & Power, Tata Steel, NMDC, Sesa Goa, Nalco, SAIL and Sterlite Industries edged lower on concerns about the health of the Chinese economy after a survey showed further slowdown in China's manufacturing sector in June 2013.

On the sectoral front, realty witnessed the maximum loss in trade followed by metal, banking, public sector undertaking and oil and gas while there were no gainers on the BSE sectoral space. The broader indices too were feeling the selling pressure while, the market breadth on the BSE was negative; there were 277 shares on the gaining side against 1,002 shares on the losing side while 41 shares remain unchanged.

The BSE Sensex opened at 19,069.20; about 176 points lower compared to its previous closing of 19,245.70, and has touched a high and a low of 19,069.20 and 18,822.65 respectively.

The index is currently trading at 18,876.43, down by 369.27 points or 1.92%. There were 2 stocks advancing against 28 declines on the index.

The overall market breadth has made a weak start with 20.98% stocks advancing against 75.91% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices down by 1.34% and 1.04% respectively. 

The top losing sectoral indices on the BSE were, Realty down by 3.59%, Metal down by 3.36%, Bankex down by 2.88%, Oil & Gas down by 1.92% and PSU down by 1.92% while there were the no gainers on the sectoral index.

The only gainers on the Sensex were Wipro up by 0.79% and Infosys up by 0.12%. On the flip side, Jindal Steel was down by 5.86%, Tata Steel was down by 4.58%, Hindalco Industries was down by 4.17%, ICICI Bank was down by 3.82% and Sterlite Industries was down by 3.58% were the top losers on the Sensex.

Meanwhile, the Central Board of Direct Taxes' (CBDT) chairperson, Sudha Sharma said that the income tax department will focus on non-filers and stop-filers to increase government's revenue collection. In her first communication to the Income Tax department, she said that the number of people who pay taxes in the country is too small and raised doubt over the accuracy of latest data that only 42,800 people in the country have an annual income of more than Rs 1 crore. 

By adding further, she said that potential for tax collection in India is much higher than what we achieve at present. Although, the I-T department’s endeavor would be to promote voluntary compliance and provide a hassle-free service to honest tax payers, it will also have to focus on non-filers and stop-filers in order to enhance the tax base and augment tax collection. ‘We aim at achieving a tax regulation regimen in India which can match the best in the world’ she added.  

The net direct tax collection in April-May period rose by 6.44% to Rs 37,596 crore as compared to the same period of previous fiscal. The government has fixed a direct tax collection target of Rs 6.68 lakh crore for the current fiscal, up from Rs 5.65 lakh crore in the previous fiscal. Meanwhile, to boost the tax revenue, the government is doing all efforts include issuing notices to tax evaders and set advertising campaign etc. Further, the government is addressing hurdles like human resources, technology and time to improve tax collection and deal with the menace of tax evasion.

The CNX Nifty opened at 5,754.15; about 68 points lower as compared to its previous closing of 5,822.25, and has touched a high and a low of 5,755.00 and 5,686.60 respectively.

The index is currently trading at 5,697.65, down by 124.60 points or 2.14%. There were 1 stocks advancing against 49 declines on the index.

The only gainer of the Nifty was Infosys up by 0.11%. On the flip side, DLF down by 6.05%, Jindal Steel down by 5.86%, Tata Steel down by 4.71%, JP Associate down by 4.50% and Hindalco Industries down by 4.46% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite dropped 30.42 points or 1.42% to 2,113.03, Hang Seng tumbled 528.72 points or 2.52% to 20,458.17, Jakarta Composite declined 134.92 points or 2.81% to 4,671.73, KLSE Composite dipped 10.28 points or 0.58% to 1,762.60, Nikkei 225 decreased 117.42 points or 0.89% to 13,127.80, Straits Times crumbled 65.47 points or 2.04% to 3,148.32, KOSPI Composite contracted 37.65 points or 1.99% to 1,850.66 and Taiwan Weighted was down by 103.56 points or 1.29% to 7,903.83.