Benchmarks jittery on Fed's announcement

The benchmarks found some support at lower levels after the big gap down opening and seem to be recuperating for some time now during the late morning session. Institutional investors booked profits across the board after the US Federal Reserve Chairman Ben Bernanke said on Wednesday that the Fed could begin to ratchet down its key stimulus program later this year, signaling a growing confidence in the US economy. The rupee, in line with other currencies, plunged following the US Federal Reserve' Chairman's comments. The partially convertible rupee was at 59.63 down 92 paise against its previous close of 58.71. It fell to an all-time low of 59.93 in trade today.

Sentiments turned bearish largely in line with weak trend in the Asian region following overnight sharp falls at the US market after Federal Reserve Chairman Ben Bernanke said it could start tapering off its massive stimulus programme later this year, triggering major sell-off by funds. On the global front, 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, the traders were seen selling in Metal, Realty and Bankex sector. In scrip specific developments, Metal stock  such as 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.

In scrip specific actions, Glenmark Pharmaceuticals rose after the pharma major Glenmark's US generics arm has received final approval from the US Food and Drug Administration to sell riluzole tablets, indicated for the treatment of sclerosis, in 50 mg strength. Wipro soared after the IT major won a large technology outsourcing contract, potentially valued at close to $ 500 million (Rs 2,900 crore) from Citigroup, according to people familiar with the development. Reliance Industries slumped after UK's BP plc has asked Petroleum Ministry to compensate for a Krishna Godavari basin block that it is being forced to surrender after Defence Ministry restrictions made oil and gas exploration impossible. BP along with Reliance Industries had won the deep-sea KG-DWN-2005/2 or KG-D17 block in the seventh round of auction under New Exploration Licencing Policy (NELP) in 2008.Sintex Industries dropped after the National Stock Exchange of India (NSE) has decided to exclude the company from Futures and Options segment with effect from August 30.RPG Life Sciences tanked after the US Food and Drug Administration (USFDA) has issued a warning letter to the company for violation of current good manufacturing practices (CGMP) norms at its two plants at Ankleshwar and Mumbai.

Meanwhile, the NSE Nifty and BSE Sensex were trading just below their psychological 5,700 and 18,900 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 394:1221. The BSE Sensex is currently trading at 18875.19, down by 370.51 points or 1.93% after trading in a range of 19069.20 and 18822.65. There were 3 stocks advancing against 27 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 1.26% and Small cap index was down by 1.03%.

The top losing sectoral indices on the BSE were, Metal down by 3.90%, Realty down by 3.32%, Bankex down by 2.97%, Capital Goods down by 2.03% and Oil & Gas down by 1.99% while there were the no gainers on the BSE.

The only gainers on the Sensex were Sun Pharma up by 1.57%, Wipro up by 0.77% and TCS up by 0.20%. On the flip side, Jindal Steel was down by 6.45%, Hindalco Industries was down by 5.52%, Tata Steel was down by 5.23%, Sterlite Industries was down by 3.87% and  ICICI Bank was down by 3.87% were the top losers on the Sensex.

Meanwhile, In a biggest sale of G-Secs so far this year, the market regulator - Securities and Exchange Board of India (SEBI) will conduct an auction for grant of investment limits to foreign investors in government debt securities worth over Rs 42,000 crore. This would be the first auction for debt securities since a hike in Foreign Institutional Investors (FIIs) limits in government debt to $30 billion, from $25 billion, earlier this month.

This move by the market regulator follows a robust interest shown by the FIIs for sale of government debt bond investment limits to the tune of Rs 5,533 crore last month, which had attracted bids worth more than Rs 10,000 crore. Besides, an expert committee had also recommended the SEBI to further ease the regulations governing registration for FIIs and make it easier for them to invest in India.

A total of 68 FIIs had participated in last month's auction, while 26 bids were declared successful. SEBI auctions debt limits for FIIs is conducted on the 20th of every month. The government recently relaxed ownership limits in Indian debt for FIIs.

Last year, FIIs invested around Rs 35,000 crore in Indian debt market. However, so far in June, FIIs made a net outflow of over Rs 20,000 crore from the debt securities, after a net inflow of close to Rs 25,000 crore in the first five months of 2013 as investors were concerned over the global uncertainty and weak rupee.   

The CNX Nifty is currently trading at 5,699.70 down by 122.55 points or 2.09% after trading in a range of 5,755.00 and 5,686.60. There were 3 stocks advancing against 47 declines on the index.

The only gainers of the Nifty were Sun Pharma up by 1.62%, Ranbaxy up by 0.27% and TCS up by 0.25%. On the flip side, Jindal Steel down by 6.47%, DLF down by 5.74%, Hindalco Industries down by 5.61%, Tata Steel down by 5.39%, JP Associate down by 5.05% and were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped 40.39 points or 1.88% to 2,103.07, Hang Seng tumbled 541.31 points or 2.58% to 20,445.58, Jakarta Composite declined 141.41 points or 2.94% to 4,665.24, KLSE Composite dipped 10.22 points or 0.58% to 1,762.66, Nikkei 225 decreased 262.35 points or 1.98% to 12,982.87, Straits Times crumbled 67.20 points or 2.09% to 3,146.59, KOSPI Composite contracted 42.52 points or 2.25% to 1,845.79 and Taiwan Weighted was down by 106.58 points or 1.33% to 7,900.81.