Benchmarks add losses; Nifty plunges below 5,600 mark

Indian equity markets added losses to continue their weak trade hovering near the lowest point of the day in the late afternoon session on account of selling in frontline blue chip counters and taking cues from weak global trades. The sentiments were on negative mood after Goldman Sachs became the latest bank to downgrade China’s economic growth saying tighter financial conditions and reforms are downside risks for the world’s second largest economy. The cautious sentiment prevailed despite C Rangarajan, Chairman of Prime Minister’s Economic Advisory Council (PMEAC) stated that he is optimistic of GDP growth pegging over 6% for the current fiscal year. For FY14, he sees CAD at 4.7-4.8% of GDP. Traders were seen selling in Realty, Consumer Durables and Capital Goods sector stocks. Additionally, the government’s efforts to curb the import of gold and some of the financial institutions’ decisions to curb lending against sale of gold and gold ETFs is having a negative impact on the shares of companies like PC jewelers, Shree Ganesh Jewellery, Gitanjali Gems and TBZ etc which is involved with gem and jewellery industry. In scrip specific development, Jaiprakash Power Ventures was trading weak after its 400 MW Vishnuprayag hydro-power plant located in Chamoli district in state of Uttarakhand was shut down following heavy rain in the state. Ranbaxy Laboratories was trading in red on reports that the US Food and Drug Administration had raised concerns about its plant in Mohali.

On the global front, all the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,600 and 18,600 levels respectively. The market breadth on BSE was negative in the ratio of 513:1555, while 117 scrips remain unchanged. 

The BSE Sensex is currently trading at 18,518.78, down by 255.46 points or 1.36% after trading in a range of 18,714.06 and 18,517.81. There were 4 stocks advancing against 26 declines on the index.

The broader indices too slid further in red; the BSE Mid cap and Small cap indexes were trading down by 2.57% and 1.90% respectively.

While, there were no gainers on BSE, the top losing sectoral indices on the BSE were, Realty down by 4.93%, Consumer Durables down by 3.51%, Capital Goods down by 3.06%, PSU down by 2.34%, and Auto down by 1.85%.

The top gainers on the Sensex were Tata Power up by 1.10%, Sun Pharma up by 0.56%, ICICI Bank up by 0.15% and NTPC up by 0.10%. On the flip side, Sterlite Industries down by 4.09%, BHEL down by 3.31%, L&T down by 2.89%, SBI down by 2.74% and Hero MotoCorp down by 2.48% were the top losers on the Sensex.

Meanwhile, constituted to liberalise the India's foreign direct investment (FDI) policy, the Arvind Mayaram committee has recommended nine sectors be categorised as those where Indian ownership and control will be mandatory. These sectors include FM radio, print media (news & current affairs), stock exchanges along with depositories and clearing corporation, power exchanges, petroleum & natural gas refining, insurance, defence production and private security agencies among others.

The committee has suggested keeping the FDI cap at 49 per cent in these nine sectors through the automatic route except for defence production and private security agencies to protect India's strategic interests in these sectors and will be subject to FIPB scrutiny. Further, it has also clarified that FDI will not include portfolio investments in insurance and petroleum & natural gas refining.

The proposal is currently needed to be vetted by the Foreign Investment Promotion Board (FIPB) and if accepted will lead to significant liberalization of some sectors, such as commodity exchanges, stock exchanges and insurance, in which FDI up to 49 per cent will be allowed. The panel has also suggested for 100 per cent foreign investment in those sectors where Indian control and ownership are not material. Presently, 100 per cent FDI is allowed under the automatic route in infrastructure, energy and manufacturing sectors.

Further, there are many sectors in India, which are still in their nascent stage and require financial security and the panel has also recommended many sectors including IP services in telecom, broadcasting carriage services, uplinking and down linking of non-news and current affairs and TV channels, printing among others for 100 per cent FDI under automatic route.  

The CNX Nifty is currently trading at 5,586.60, down by 81.05 points or 1.43% after trading in a range of 5,640.00 and 5,582.90. There were 5 stocks advancing against 45 declines on the index.

The top gainers of the Nifty were Tata Power up by 1.41%, Lupin up by 0.97%, Sun Pharma up by 0.69%, HCL Tech up by 0.37% and NTPC up by 0.28%. On the flip side, JP Associate down by 11.36%, DLF down by 7.79%, Ranbaxy Laboratories down by 6.41%, Cairn India down by 5.33% and Kotak Bank down by 4.18% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite tumbled 5.30%, Hang Seng declined 2.22%, Jakarta Composite slipped 1.69%, KLSE Composite dropped 0.97%, Nikkei 225 contracted 1.26%, Straits Times decreased 1.29%, KOSPI Composite dropped 1.31% and Taiwan Weighted was down by 0.45%.

The European markets were trading in red; France’s CAC 40 was down 1.17%, Germany’s DAX lost 1.33% and the United Kingdom’s FTSE 100 edged higher by 1.55%.