Annihilation continues at D-street; Rupee’s fall add to woes

Annihilation prevailed at D-street as market-participants increasing scrambled for exits, largely unnerved by US Federal Reserve chairman Ben Bernanke confirming the Fed would begin reducing its stimulus spending later this year, which triggered an impulsive sell-off across the globe. Besides, domestic qualms over Indian currency also kept investors on the edge. On the currency front, the rupee trimmed its early losses but was still quoted lower by 83 paise to 59.53 per dollar after hitting 60-level on strong demand for the American currency from banks and importers amidst sharp fall in equity markets. Closer home, prolonging its free-fall, benchmark 30 and 50 share indexes,Sensex and Nifty, plunging over colossal 2%, was gyrating sub 18,900 and 5,700 levels respectively. Meanwhile, destruction also took place at broader spaces, which were trading with massive loss of over a percent.  A sluggish start of European markets also added to the investors’ angst. Meanwhile, Asian shares tumbled to nine-month lows on Thursday as slowing Chinese manufacturing activity deepened wariness of investors largely bothered by Fed’s result. Amidst across the board selling, stocks from Realty, Metal and Banking counters were the worst hit of the session. The overall market breadth on BSE is in favour of declines, which thumped advances in the ratio of 1462:498: while 123 shares remain unchanged.

The BSE Sensex is currently trading at 18,846.98, down by 398.72 points or 2.07% after trading in a range of 19,069.20 and 18,816.79. There were 4 stocks advancing against 26 declines on the index.

The broader indices too witnessed nasty laceration; the BSE Mid cap and Small cap indices plunged 1.41% and 1.28% respectively.

Amidst across the board selling, the top losing sectoral indices on the BSE were, Realty down by 4.60%,Metal down by 4.80%, Bankex down by 3.43%, Power down by 2.48% and PSU down by 2.32% while there were no gainers on the BSE.

The only gainers on the Sensex were Sun Pharma up by 1.90%, Wipro up by 0.87%, Cipla up by 0.57% and Bajaj Auto up by 0.14%. On the flip side, Jindal Steel down by 6.98%, Hindalco Industries down by 6.05%, Tata Steel down by 4.97%, Sterlite Industries down by 4.46% and ICICI Bank down by 4.00% 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 5,692.45, down by 129.80 points or 2.23% after trading in a range of 5,755.00 and 5,683.95. There were 5 stocks advancing against 45 declines on the index.

The only gainers of the Nifty were Sun Pharma up by 1.97%, Cipla up by 0.72%, Ambuja Cements up by 0.16%, Bajaj Auto up by 0.07% and TCS up by 0.01%. On the flip side, DLF down by 7.30%, Jindal Steel down by 6.96%, Hindalco Industries down by 6.18%, JP Associate down by 5.52% and Tata Steel down by 5.15% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped 2.73%, Hang Seng tumbled 2.71%, Jakarta Composite declined 3.34%, KLSE Composite dipped 0.70%, Nikkei 225 decreased 1.74%, Straits Times crumbled 2.10%, KOSPI Composite contracted 2.00% and Taiwan Weighted descended 1.35%.

European markets also got off to a sluggish start; with CAC 40 plunging 1.82%, DAX sliding 0.39% and FTSE 100 declining by 0.40%.