Markets continue to grind lower; Sensex falls over 1000 points in two days

Indian equity markets continued trading lower as bears appeared to have taken full control on Dalal Street on Monday. The Sensex was down by 210.78 points, while Nifty sliped 73.65 points. The Sensex plunged over 1000 points in the last two days and Nifty traded below the crucial level of 5500 conveying bad news for the investors. In the currency market, the rupee cartwheeled to life time lows amid dollar strengthening against basket of currencies. Investors’ were worried about the slow pace of economic reforms in India, which has made it harder for the country to finance its hefty current account shortfall. On sectoral front, automobile and bank stocks were among the most prominent losers. Several stocks from capital goods, healthcare and FMCG sections were also trading notably lower. Information technology stocks are off their earlier high levels, while metal stocks have come back strongly after a weak start.

On the global front, Asian markets are mixed. Japan reversed its earlier losses after the yen resumed its decline against the US $. Japan's trade deficit came in wider than expected for thirteenth straight months. Back home, the market breadth was favoring the negative trend; there were 720 shares on the gaining side against 1128 shares on the losing side, while 107 shares remained unchanged. 

The BSE Sensex is currently trading at 18,387.40 down by 210.78 points or 1.13% after trading in a range of 18,587.38 and 18,303.20. There were only 9 stocks advancing against 21 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was down by 0.86%, while Small cap index up by 0.64%.

The top gaining sectoral indices on the BSE were, Metal up by 2.26% and IT up by 0.51%. While, Auto down by 2.93%, Bankex down by 2.55%, Healthcare down by 2.55% and PSU down by 1.42% were the top losers indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 4.25%, Hindalco Inds up by 3.27%, Sterlite Inds up by 3.23%, Jindal Steel up by 3% and Tata Power up by 1.84%. On the flip side, Sun Pharma down by 4.85%, Mahindra and Mahindra down by 4.77%, Bajaj Auto down by 4.29%, Bharti Airtel down by 3.97% and Hero Moto Corp down by 3.56% were the top losers on the Sensex.

Meanwhile, as per the Planning Commission member B K Chaturvedi, increased domestic production of coal would help reduce its imports and in a way help contain the country’s widening current account deficit (CAD). India has substantial coal reserves, however demand for the dry fuel is much higher than domestic production, resulting in increased coal imports. In the recent period, the coal imports into the country have increased by almost 40 percent and touched $18 billion, which is twice the value of the import a few years ago. Meanwhile, the CAD widened to a record high of 4.8 percent of GDP in the previous fiscal.

He further said that, the domestic production of coal has to be increased to meet the demand of various segments, especially power sector as acute coal shortages in the country is hurting electricity generation and many power producers, which are dependent on imported fuel to fire their plants. Indian coal demand touched 772.84 million tonnes (MT) during 2012-13 period whereas production was at 557.60 MT. Import of coal steadily increased to around 113 MT till Jan during 2012-13 from 20.93 MT during 2000-01.

The government policy is very clear on increasing domestic coal output to cater to power generation needs, but there are certain issues to be sorted out like environmental clearances and land acquisition etc. He also suggested that the efficiency of power plants need to be improved so that less coal could be consumed for generating electricity.

The CNX Nifty is currently trading at 5,434.20 down by 73.65 points or 1.34% after trading in a range of 5,499.65 and 5,409.95. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Tata Steel up by 4.23%, SesaGoa up by 3.88%, Jindal Steel up by 2.86%, NMDC up by 2.80% and Hindalco up by 2.73%. On the flip side, Bank of Baroda down by 7.42%, Sun Pharma down by 5.06%, M&M down by 4.56%, Bajaj Auto down by 4.50% and Axis Bank down by 4.06% were the major losers on the index.

The most of Asian equity indices were trading in red; Straits Times down by 0.36%, Jakarta Composite down by 4.37%, KLSE Composite down by 0.20%, Seoul Composite down by 0.13% and Taiwan Weighted down by 0.31%. While, Shanghai Composite up by 0.58% and Nikkei 225 was up by 0.79%.