Butchery continues at Dalal Street; Sensex recoils from 18350 level

Butchery continues at Dalal Street, with bulls finding no place to hide, barring Metal and Information Technology counters, which sustaining resilience are acting as knights in the shining armor. Accentuated selling pressure on account of global jitters and domestic concerns, are making investors extremely pessimistic of holding risky equities that are languishing in the sea of red. Trading near day’s low, Sensex has breached 18350 mental marks, while Nifty is steadily receding towards the 5400 level.  Meanwhile, broader indices too are clobbered out of shape with cut of over a percent.

On the global front, Asian stocks are wavering between gains and losses Monday as investors await U.S. Federal Reserve minutes this week for clues on when the central bank will cut back on its easy money policies. Meanwhile, in sync with Asian counterparts, European shares too have got off to a negative start.

Closer home, Rupee’s depreciation to fresh lows despite policy makers' efforts to defend the currency, is hurting investors’ sentiment. Unconvinced about the efficacy of steps unveiled last week to contain the current account deficit at 3.7 percent of gross domestic product (GDP) during the current fiscal year sharply lower than the record high 4.8 percent in the previous year, Indian rupee has fallen to a record low of 62.61/$ on Monday and looks poised for further losses. In the sea of red, stocks from rate sensitive Bankex and Auto comibined with defensive HealthCare and Fast Moving Consumer Goods sector are the major losers. The overall market breadth on BSE is in favour of declines which have thumped advances in the ratio of 1233:723; while 134 shares remained unchanged.

The BSE Sensex is currently trading at 18345.10, down by 253.08 points or 1.36% after trading in a range of 18,587.38 and 18303.20. There were only 8 stocks advancing against 22 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading lower by 1.15% and 0.73% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 1.66% and IT up by 0.49%.  While, Auto down by 3.12%, Bankex down by 2.61%, Healthcare down by 2.50%, FMCG down by 1.56% and PSU down by 1.54% were the top losers indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 3.00%, jindal Steel up by 2.77%, Tata Power and Hindalco Inds were up by 2.73% and Sterlite Industries up by 1.12%. On the flip side, Bharti Airtel down by 5.55%, Sun Pharma down by 4.85%, Mahindra and Mahindra down by 4.64% and Hero Moto Corp down by 3.644% were the top losers on the Sensex.

Meanwhile, reassuring investors that there would be no reversing the path of globalisation of Indian economy, Prime Minister Manmohan Singh ruled out the possibility of India witnessing a repeat of the 1991 balance of payments crisis, which had forced India to pledge its gold reserves abroad to raise foreign exchange.

Manmohan Singh said that there is no question of going back to1991 balance of payment crisis as at that time foreign exchange in India was a fixed rate, but now it is linked to market, thereby we only have to correct the rupee volatility. By adding further, Prime Minister said that in 1991, the country had only foreign exchange reserves for 15 days and now we have reserves of six to seven months. Regarding the high current account deficit (CAD) of the country, he said that high import of gold was one of the major factors contributing to it.

India’s CAD widened to a record high of 4.8 percent of GDP in the previous year on account high gold imports. India imported 845 tonnes of yellow metal in FY13. Meanwhile, during the April-June quarter of 2013, the country witnessed record gold imports of 310 tonnes, highest in the last ten years. Further, widening CAD is also putting pressure on Rupee, which recently depreciated to a record low of over 62 per dollar. Meanwhile, in order to curb the gold import, the government has taken several steps, including raising import duty. Recently, the government has hiked imports duty on gold for a third time in eight months to 10% from the earlier 8%. RBI also imposed restrictions on import of gold coins, medallions and dorebars and notified that gold importers would now require licence from Directorate General of Foreign Trade (DGFT).

The CNX Nifty is currently trading at 5,428.40, down by 79.45 points or 1.44% after trading in a range of 5,499.65 and 5,409.95. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were NMDC up by 3.22%, Tata Steel up by 3.17%, Jindal Steel up by 2.74%, Hindalco up by 2.73% and SesaGoa up by 2.65%. On the flip side, Bank of Baroda down by 8.00%, Bharti Airtel down by 5.11%, Sun Pharma down by 4.99% and Bajaj Auto down by 4.78% and Mahindra & Mahindra down by 4.55% were the major losers on the index.

The most of Asian equity indices were trading in red; Straits Times down by 0.35%, Jakarta Composite down by 3.30%, KLSE Composite down by 0.33%, Seoul Composite down by 0.13% and Taiwan Weighted down by 0.13%. While, Shanghai Composite gained 0.66% and Nikkei 225 was up by 0.79%.

European shares have got off to a positive start; with CAC 40 declining 0.38%, DAX sliding by 0.19% and FTSE 100 losing 0.04%