Weak trade persists; Sensex below 19,300 mark

Indian equity markets held off the initial lows and tried to regain some footing, however were trading in the red in the late afternoon session as frontline blue chip counters were seen languishing due to huge sell offs on account of weak Asian cues and the depreciating rupee, that weighed heavy on investors’ sentiments. Markets recovered from day lows on the back of buying witnesses in IT and technology shares as investor hoped that weakening rupee could boost the revenue of these sectors. Meanwhile, the rupee fell to an all-time low of 61.22 per dollar amid heavy demand for the American currency, which is also sparking speculation about potential measures from the Reserve Bank of India (RBI) to check the rupee slide. Asian shares also tumbled today on fears that the US Federal Reserve could soon begin tapering its bond-buying stimulus after a stronger-than-expected jobs report. The frontline gauges continued to trade below their crucial 5,850 (Nifty) and 19,300 (Sensex). Traders were seen piling positions in IT, Teck, FMCG and Healthcare stocks, while, selling was witnessed in PSU, realty, oil and gas and metal stocks. In scrip specific development, Wipro, Dr. Reddy's, Sun pharma and Infosys were trading over 1 percent higher, while ONGC, HDFC, NTPC and Tata motors were trading below over 1.5 percent higher.

The market breadth on BSE was negative in the ratio of 858:1266, while 107 scrips remain unchanged. 

The BSE Sensex is currently trading at 19275.21, down by 220.61 points or 1.13% after trading in a range of 19422.69 and 19185.92. There were 6 stocks advancing against 24 declines on the index.

The broader indices were also trading in red; the BSE Mid cap and Small cap indices were trading lower by 0.40% and 0.53% respectively.

The top gaining sectoral index on the BSE was, Teck up by 0.59%, IT up by 0.49%, FMCG up by 0.14% and Health Care up 0.01%, while PSU down by 2.30%, Realty down by 2.06%, Oil & Gas down by 2.02%, Metal down by 2.02% and Bankex down by 1.56% were the top losers on the BSE.

The top gaining on BSE Sensex were Wipro up 1.48%, Sun Pharma up 0.90%, Dr Reddys Lab up 0.87%, Infosys up 0.84% and ITC up by 0.37%. On the flip side, top losers on Sensex included, ONGC down by 3.55%, HDFC down by 3.16%, NTPC down by 2.82%, Tata Motors down by 2.77% and ICICI Bank was down 2.64%.

Meanwhile, the government is all set to improve its relations with financial regulators, mainly the central bank amid concerns that lack of discussion among policymakers is hurting management of the economy at a time, when the rupee depreciated to a record low of over 60 per dollar. The government is of the view that there is a need of possible coordinated effort to stem the rupee's slide and is considering a measure to appoint a senior official in the finance ministry to work closely with the regulators. During the global financial crisis in 2008, the finance ministry, RBI and SEBI worked closely to contain the fallout in Indian markets.

Concerned over the falling rupee value, last week Finance Minister P Chidambaram held a meeting with India's top economic policymakers, including RBI Governor Duvvuri Subbarao, Planning Commission Deputy Chairman Montek Singh Ahluwalia, PM's Economic Advisor C Rangarajan and the finance ministry's top bureaucrat Arvind Mayaram, to discuss measures to stabilise the weakening currency.

The government wants a harmonious relationship between the finance ministry, the Resreve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) so that differences at the leadership level do not end up jeopardizing plans for co-ordinate action to handle an external shock. At present, the key macroeconomic challenge to the government and the RBI is to manage short-term external debt, amounting to $172 billion, which is due for repayment in next year, while India's total forex reserves are presently just under $285 billion.    

The CNX Nifty is currently trading at 5,796.35, down by 71.55 points or 1.22% after trading in a range of 5,833.85 and 5,775.55.

Of the 50, 40 stocks were declining, those which were on gaining side, included HCL Techup by 2.41%, Cairn up by 1.86%, IndusInd Bank up by 1.65%, Reliance Infrastructure up by 1.64% and Sun Pharmaceuticals up by 0.83%. On the flip side, BPCL down by 5.31%, JP Associate down by 5.05%, ONGC down by 3.91%, HDFC down by 3.25% and NTPC down by 2.96% were the major losers on the index.

All the Asian equity indices continued to reel under pressure; Shanghai Composite declined 2.44%, Hang Seng contracted 1.31%, Jakarta Composite decreased 3.68%, Straits Times dropped 0.42%, KOSPI Composite shed 0.90%, Taiwan Weighted was down by 1.44%, Nikkei 225 dropped by 1.40% and KLSE Composite inched lower 0.53%.

The European markets were trading in green; France’s CAC 40 was up 1.64%, Germany’s DAX up by 1.53% and the United Kingdom’s FTSE 100 edged higher by 0.26%.