Obliteration continues at D-street; benchmarks sink to day’s low

Obliteration continued at Dalal Street as market-participants increasingly growing wary of relentless slide, are squaring off position in every possible stock they hold. The passage of food security bill which has fuelled concerns over growing fiscal deficit, which has hit economic growth in recent months and has been blamed for the sharp decline of the Indian rupee, mainly has led to the free-fall of Indian equity markets. Additionally, concerns over possible downgrade of India’s sovereign rating by by global rating agency, Fitch also added to the pessimistic environment. Trading near day’s low, Sensex and Nifty, nursing heavy losses of over two and half percent, are trading below the crucial 18,200 and 5,400 levels respectively. Meanwhile, broader indices too reeling under pressure are trading with a cut of over a percent.

Pessimistic global-set is also adding to the downslide of the markets. Asian stocks fell, with the regional benchmark index poised to snap a two-day gain, as the US vows to hold Syria’s government liable for deadly chemical weapons attacks on its people, damping investors’ risk appetite. Meanwhile, European markets slid for a second day after U.S. Secretary of State John Kerry said the Obama administration will hold Syria accountable for using chemical weapons. U.S. index futures were little changed.

Closer home, with almost no place to hide, stocks from Information Technology and Technology counters mainly are acting as knight in shining armor, while rest all the 11 sectoral indices on BSE are down and out in red.  Major losers amongst them are stocks from Banking, Capital Goods and Fast Moving Consumer Goods counters. The overall market breadth on BSE is in the favour of  declines which have thumped advances in the ratio of 1355:583; while 127 shares remained unchanged.

The BSE Sensex is currently trading at 18130.32, down by 472.81 points or 2.31% after trading in a range of 18,460.72 and 18034.04. There were only 8 stocks advancing against 22 declines on the index.

The broader indices too continued to bleed; the BSE Mid cap and Small cap index were trading lower by 1.58% and 1.12% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.97% and Teck up by 0.40%. While, Bankex down by 4.11%, Capital Goods down by 3.46%, FMCG down by 3.17%, Consumer Durables down by 2.99% and PSU down by 2.90% were the top losers indices on the BSE.

The top gainers on the Sensex were, Sesa Goa up by 2.06%, Dr Reddys Lab up by 1.64%, Infosys up by 1.17%, TCS up by 0.98% and Wipro up by 0.69%. On the flip side, HDFC down by 6.80%, HDFC Bank down by 5.36%, Coal India down by 4.26%, BHEL down by 4.08% and L&T down by 4.04% were the top losers on the Sensex.

Meanwhile, Congress President Sonia Gandhi's much propagated Food Security Bill, after days of unruly scenes in Parliament, finally won the Lok Sabha approval.Endorsed as India's most ambitious and historic initiative, the bill, which is to ensure food and nutritional security to its people at affordable prices was adopted after an intensive debate and protracted voting process.

The Rs 1,30,000 crore bill aims to benefit two-thirds of India's 1,20,000 crore people and eradicate hunger and malnutrition, which continues to be a gargantuan trouble in India despite its impressive economic growth in recent years.

With the approval of this bill, low-income people would be eligible to obtain rice, wheat and other grains far below the market price. Rice would be available at 3 rupees a kilo, wheat at 2 rupees and cereals at 1 rupee per person per month.

However, the bill, widely seen as an gimmick by ruling government to boost its chances of winning a third term in general elections next year, would add to the growing deficits which have hit economic growth in recent months and which have been blamed for the sharp decline of the Indian rupee.

The CNX Nifty is currently trading at 5,342.70, down by 133.80 points or 2.44% after trading in a range of 5,427.40 and 5,312.75. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 2.27%, Dr Reddys Lab up by 1.81%, Infosys up by 1.25%, HCL Technologies up by 1.10% and Power Grid Corporation up by 1.07%. On the flip side, IDFC down by 12.56%, HDFC down by 6.81%, Indusind Bank down by 6.11%, HDFC Bank down by 5.88% and Axis Bank down by 4.92% were the major losers on the index.

The most of the Asian equity indices were trading mixed in red; Straits Times down by 1.45%, KLSE Composite down by 1.24%, Taiwan Weighted down by 0.94%, Seoul Composite down by 0.11%, Hang Seng down by 0.41%, Nikkei 225 was down by 0.69% and Jakarta Composite down by 3.23%. While, Shanghai Composite up by 0.22% was the lone gainer amongst Asian pack.

European shares got off to a negative start; with CAC 40 declining by 0.22%, DAX sliding by 0.67% and FTSE 100 plunging by 0.55%.