Benchmarks make gap-down opening; Rupee breaches 64/$ mark

Extending southward journey for third consecutive day, Indian equity indices have made a gap-down opening with frontline indices declining below crucial 5,350 (Nifty) and 18,100 (Sensex) levels in early deals on Tuesday on concerns over depreciating rupee that hit a fresh all time low, breaching the 64/$ mark today. Sentiments were dampened after the government imposed new restrictions on foreign exchange outflows and gold imports in an attempt to prop up the rupee. Banking shares continued to slide further in trade today with most the frontline stocks trading at their respective multi-year lows as yields on government bonds surged.

Global cues too remained sluggish with the US markets giving up their early gains lost momentum in second half to extend their losing streak overnight. Moreover, Most of the Asian equity indices were trading in the red at this point of time as investors remained concerned that the Fed tapering its stimulus after last week's flurry of data. Indonesia’s stock market led the Asian decliners with over 5 percent drop as investors worried about the looming balance of payments crisis following Friday’s data showing a wider-than-anticipated current account deficit.

Back home, selling was both brutal and wide-based, as none of sectoral indices on BSE were spared. Healthcare and Auto remained the top loser on the BSE sectoral space, while consumer durables, realty, capital goods, banking, metal and public sector undertaking too loses significantly. The broader indices too were struggling to get some traction, while the market breadth on the BSE was negative; there were 421 shares on the gaining side against 750 shares on the losing side while 40 shares remain unchanged.

The BSE Sensex opened at 18,142.83; about 164 points lower compared to its previous closing of 18,307.52, and has touched a high and a low of 18,143.12 and 17,970.98 respectively. The index is currently trading at 18,084.83, down by 222.69 points or 1.22%. There were 5 stocks advancing against 25 declines on the index.

The overall market breadth has made a weak start with 34.76% stocks advancing against 61.93% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 0.99% and 0.38% respectively. 

There were no gaining sectoral indices on the BSE while Health Care down by 2.54%, Auto down by 2.07%, Consumer Durables down by 1.87%, Realty down by 1.37% and Capital Goods down by 1.34% were the top losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 0.22%, Tata Power up by 0.20%, Sterlite Industries up by 0.20%, BHEL up by 0.15% and Wipro up by 0.11%. On the flip side, Sun Pharma was down by 5.09%, Mahindra & Mahindra was down by 3.65%, Maruti Suzuki was down by 2.49%, Bharti Airtel was down by 2.32% and Tata Steel was down by 2.31% were the top losers on the Sensex.

Meanwhile, amid a poor performance in road development and consequent scaling down of the annual target to almost half at 5,000 km for 2013-14, the Road Transport and Highways Ministry has pinned hopes on engineering- procurement-construction (EPC) mode for project awards to pick momentum in road construction. The Ministry has already clarified that it has decided to adopt this road building approach for projects which are not viable on Public Private Partnership (PPP) basis. All public funded National Highways projects, and centrally sponsored road works, costing more than Rs 10 crore would henceforth be awarded on EPC mode of contract, it notified.

In the previous fiscal, road ministry awarded only 1,400 km of projects against a target of 9,500 km and had cited reasons like lukewarm response by the bidders owing to a number of factors including delay in clearances. Further, it has subsequently scaled down its projects award target by nearly half to 5,000 km for the current fiscal.  Meanwhile, in the wake continued dismal show in award of projects by the Ministry, the 12th Five Year Plan (2012-17) envisages construction of 20,000 km of two-lane National Highways based on EPC mode.

The Government has adopted the EPC mode of construction to ensure implementation of projects to specified Standards with a fair degree of certainty relating to cost and time and with a view to enabling a transparent, fair and competitive roll out of National Highway projects. The EPC mode assigns the responsibility for investigation, design and construction to contractors for a lump sum price awarded through competitive bidding, wherein provision for index-based price variation is made. Further, under the EPC model, the government spends the entire money required to build roads which may prove lucrative to builders

The CNX Nifty opened at 5,353.45; about 61 points lower as compared to its previous closing of 5,414.75, and has touched a high and a low of 5,353.45 and 5,306.35 respectively.

The index is currently trading at 5,345.20, down by 69.55 points or 1.28 %. There were 5 stocks advancing against 44 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were JP Associate up by 2.27%, Ranbaxy up by 0.50%, Tata Power up by 0.33%, Sesa Goa up by 0.19% and Infosys up by 0.15%. On the flip side, Sun Pharmaceuticals down by 5.11%, M&M down by 3.73%, Lupin down by 3.57%, Asian Paints down by 3.09% and IndusInd Bank down by 2.82% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 331.75 points or 1.48% to 22,131.95, Jakarta Composite crumbled 216.72 points or 5.02% to 4,096.80, KLSE Composite dropped 32.68 points or 1.84% to 1,745.68, Nikkei 225 shed 178.15 points or 1.29% to 13,579.98, Straits Times decreased 30.66 points or 0.97% to 3,142.67, Seoul Composite contracted 14.93 points or 0.78% to 1,902.71 and Taiwan Weighted was down by 47.02 points or 0.60% to 7,853.19

On the flip side, Shanghai Composite was up by 1.67 points or 0.08% to 2,087.27.