Markets continue lower trade on Fed's comment

Indian equity markets continued trading lower in the late morning session on Thursday, tracking massive sell-off in global markets following a likely end to the US stimulus program by mid-2014. Weak manufacturing data from China also weighed on investor sentiments. Persistent capital outflows from foreign funds also affected the market movement, as foreign institutional investors sold shares worth a net Rs 544.97 crore on June 19, 2013. Meanwhile, rupee's plunge to a new all-time low against the greenback is playing a dominant role in dragging down the stock prices on the Indian bourses. Moreover, dollar’s strength against other Asian currencies after Ben Bernanke comments that he would start withdrawing the bond purchases programme knows as Quantitative Easing 3 (QE3) in 2013, also affected the sentiments. On the sectoral front, stocks from metal, banking, realty and capital goods sectors were leading the declines, at the same time several stocks from oil, automobile, PSU, power and FMCG sectors were also down with sharp losses.

On the global front, Asian stocks traded lower on Thursday with downward sentiment on the preliminary reading of China's manufacturing PMI that sank to a nine-month-low of 48.3 in June in comparison to a final reading of 49.2 in May. Back home, the market breadth was favoring negative trend; there were 1,370 shares on the losing side against 451 shares on the gaining side, while 109 shares remain unchanged.

The BSE Sensex is currently trading at 18,845.83, down by 399.87 points or 2.08% after trading in a range of 19,069.20 and 18,822.65. There were 4 stocks advancing against 26 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.39% and Small cap index was down by 1.25%.

The top losing sectoral indices on the BSE were, Realty down by 4.49%, Metal down by 4.06%, Bankex down by 3.15%, Oil & Gas down by 2.39% and PSU down by 2.26%, while there were the no gainers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 2.25%, Wipro up by 0.63%, TCS up 0.13% and Hindustan Unilever up by 0.03%. On the flip side, Jindal Steel was down by 6.86%, Hindalco Industries was down by 5.61%, Tata Steel was down by 5.08%, Sterlite Industries was down by 4.28% and ICICI Bank was down by 3.93% were the top losers on the Sensex.

Meanwhile, in order to implement and efficiently monitoring the 12th Five Year Plan, Union Cabinet is likely to consider a proposal to merge the 147 Centrally Sponsored Schemes (CSS) into 70 across various sectors. Last month, a Group of Ministers (GoM) panel had approved the proposal for merging of 147 CSS into 70. 

The proposal includes the setting up of a flexi-funds system in each scheme, under which state governments can use 10 percent of the Budget allocated for CSS within the broader framework of the flagship programme. It also proposed the transferring of funds from the central government to the state consolidated funds and not directly to the implementing agencies, which will ensure effective utilisation of funds under CSS.  Moreover, the proposal also contains the setting up of state specific guidelines in each centrally sponsored schemes, which will be reviewed once in two years.

The GoM is considering the restructuring of CSS to resolve differences among ministries like the Tribal Affairs and Agriculture, which wanted to maintain some of the schemes for development of the sector. 

The CNX Nifty is currently trading at 5,697.15 down by 125.10 points or 2.15% after trading in a range of 5,755.00 and 5,686.60. There were 2 stocks advancing against 48 declines on the index.

The only gainers of the Nifty were Sun Pharma up by 2.35% and TCS up by 0.23%. On the flip side, DLF down by 7.22%, Jindal Steel down by 6.77%, Hindalco Industries down by 5.75%, JP Associate down by 5.45% and Tata Steel down by 5.29% were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite dropped 1.85%, Hang Seng tumbled 2.46%, Jakarta Composite declined 2.94%, KLSE Composite dipped 0.58%, Nikkei 225 decreased 1.74%, Straits Times crumbled 1.98%, KOSPI Composite contracted 2.00% and Taiwan Weighted was down by 1.35%.