Indian benchmarks collapse in early deals on weak rupee, global cues

Pressurized by feeble global cues, Indian equity benchmarks has collapsed in early deals on Friday with frontline gauges shaving off over two percentage point, tumbling below their crucial 5,650 (Nifty) and 19,000 (Sensex) levels. Sentiments got dampened after Indian rupee slipped to all time low in early trade despite a slew of measures announced by the central bank on late evening Wednesday aimed at boosting inflows and curbing outflows. The rupee was trading at 62 against the dollar, which is an all time intra-day low. Sentiments also got dented after shares of jewellery makers tumbled after the Reserve Bank of India banned imports of gold coins and medallions. Titan Industries, PC Jeweller, Rajesh Exports, Shree Ganesh Jewellery House and Tribhovandas Bhimji Zaveri (TBZ) were down 2-11% in opening deals.

Global cues mainly played the spoilsport for Indian markets with US markets plunging on Thursday reacting to some good positive economic reports that added to concerns about the Federal Reserve scaling back its stimulus program at its next meeting. Though, Asian markets were trading mixed at this point of time with Japanese Nikki tumbling over half a percent, as US stock futures traded near five-week low after Wall Street shares had their biggest one-day drop since late June.

Back home, selling was both brutal and wide based as none of sectoral indices on BSE were spared. Consumer Durables, Realty, Banking, Power and Metal remained the top loser on the BSE sectoral front. Public sector undertaking, fast-moving consumer goods and auto too shed significantly. The broader indices too were clobbered out of shape, while the market breadth on the BSE was negative; there were 734 shares on the gaining side against 963 shares on the losing side while 34 shares remain unchanged.

The BSE Sensex opened at 19297.11; about 70 points lower compared to its previous closing of 19367.59, and has touched a high and a low of 19310.95 and 18951.87 respectively. The index is currently trading at 18979.73, down by 387.86 points or 2.00%. There were 3 stocks advancing against 27 declines on the index.

The overall market breadth has made a weak start with 29.87% stocks advancing against 67.47% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 1.17% and 0.80% respectively. 

There were no gaining sectoral indices on the BSE while Consumer Durables down by 8.02%, Realty down by 3.41%, Bankex down by 3.18%, Power down by 2.90% and Metal down by 2.67% were the top losers on the sectoral index.

The top gainers on the Sensex were Hero MotoCorp up by 1.58%, Wipro up by 0.62% and Gail India up by 0.38%. On the flip side, Maruti Suzuki was down by 4.60%, NTPC was down by 3.95%, Tata Power was down by 3.79%, Jindal Steel was down by 3.73% and Mahindra & Mahindra was down by 3.50% were the top losers on the Sensex.

Meanwhile, giving some respite for the oil marketing companies, the country's oil minister, M Veerappa Moily said, “Government will consider a request from oil marketing companies to be allowed to raise diesel prices by more than the approved 50 paise a month, to bridge the losses”. The decision is yet to be taken. However, he ruled out any hike in LPG and Kerosene prices.

In January, fuel retailers were given the freedom to raise the price of subsidized diesel every month, while bulk buyers were asked to pay market rates. Since, then firms for seven times have raised diesel rates, cumulatively taking up the price of the fuel by Rs. 3.75 per litre. Meanwhile, petrol prices have been raised by five times since June. While, petrol price was last hiked by 70 paisa per litre, diesel price was upped by 50 paisa per litre on 31st July this year.

Further while, an increase in diesel prices may see prices of essential commodities go up, there is little the government can do about it, as it tries to rein in the widening current account deficit which is one of the major reasons for the rupee's slide.

The CNX Nifty opened at 5,705.45; about 36 points lower as compared to its previous closing of 5,742.30, and has touched a high and a low of 5,716.60 and 5,601.85 respectively.

The index is currently trading at 5,613.25, down by 129.05 points or 2.25 %. There were 3 stocks advancing against 47 declines on the index.

The top gainers of the Nifty were Hero MotoCorp up by 1.60%, HCL Technologie up by 0.92% and GAIL up by 0.56%. On the flip side, Axis Bank down by 6.45%, JP Associate down by 6.00%, DLF down by 5.44%, IDFC down by 5.09% and Bank of Baroda down by 4.69% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite surged 66.51 points or 3.19% to 2,148.39, Hang Seng strengthened 122.66 points or 0.54% to 22,661.91, Seoul Composite added 2.23 points or 0.12% to 1,926.14 and Taiwan Weighted was up by 60.29 points or 0.76% to 7,947.55.

On the flip side, Jakarta Composite declined 72.11 points or 1.54% to 4,613.02, KLSE Composite slipped 2.26 points or 0.13% to 1,789.95, Nikkei 225 dropped 98.10 points or 0.71% to 13,654.84 and Straits Times was down by 14.71 points or 0.46% to 3,206.21.