Indian equities continue the somber run; Nifty holds 5,000

Indian stock indices prolonged the miserable run in the afternoon trades on Wednesday as hefty across the board position squaring restricted the benchmarks from gaining ground. The fifty share index - Nifty traded with cuts of around a percent but managed to hold on to the important psychological 5,000 levels. Sentiments largely got undermined as uncertainties looming over the European region once again remained the primary overhang. Lack of clarity over the action plan from Italy and sharply higher bond yields in Euro-zone nations including France, Belgium, Austria and Spain triggered a new wave of selling pressure. Marketmen also remained on the edge amid somber leads from Asian peers where some indices even traded over two and half a percent lacerations. Back home, fears of slowdown in the economy kept investors nervous after reports that India’s September services export receipt declined by 5.63% month-on-month. The services sector contributes over 50% to India's GDP. Meanwhile, India’s state run oil marketing firms slashed petrol prices for the first time in almost three years after an increase this month sparked protests by the opposition and some members of the ruling coalition. The move sparked sharp sell-off in stocks like IOC, BPCL and HPCL in the range of 3-7%. On the sectoral front, there was no gainer while hefty selling pressure was evident in the Capital Goods pocket which languished at the bottom of the table after being butchered by over four percent. Hefty selling pressure was also evident in the Power and Oil & Gas counters which lost around two percentage point.

Moreover, the broader markets continued to trade on a depressing note with large cuts of over one and half a percentage points. While the bourses were getting butchered, serious escalation in volumes was evident as the overall turnover crossed Rs 1 lakh core mark while the market breadth on BSE was dominantly in favor of declines in the ratio of 2013:559 while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 16,695.65 down by 187.02 points or 1.11% after trading as high as 16,872.30 and as low as 16,644.85. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading in the negative zone; the BSE Mid cap index lost 1.53% and Small cap shed 1.85%.

On the BSE sectoral space there were no gainers while Capital Goods down 4.38%, Power down 2.39%, Oil & Gas down 1.93%, Realty down 1.56% and PSU down 1.28% were the major losers in the space.

M&M up 1.57%, ONGC up 1.33%, Bharti Airtel up 0.83%, Cipla up 0.72% and Jindal Steel up 0.70% were the major gainers on the Sensex, while BHEL down 6.54%, JP Associates down 5.41%, L&T down 4.33%, Hero Moto down 2.89% and Hindalco down 2.59% were the major losers on the index.

Meanwhile, in a move to give some relief to Euro-zone crisis hit local importers and exporters, the Reserve Bank of India (RBI) has increased the ceiling rate on export credit in foreign currency by 150 basis points to London Interbank Offered Rate (LIBOR) plus 350 basis points from the present ceiling rate of LIBOR plus 200 basis points, with immediate effect till March 31, 2012.

The RBI said, ‘keeping in view the tight liquidity conditions and widening of credit spreads due to recent developments in international financial markets, it has been decided to increase the ceiling rate on export credit in foreign currency.’

The apex bank has further asked the banks not to impose any additional charges like service charge, management charge, except for recovery towards out-of-pocket expenses incurred. Similar changes would be applicable in interest rates in cases where EURO LIBOR is used as the benchmark.

The alteration in the rates of interest would be valid only to fresh advances and are subject to review after March 31, 2012, the RBI said. Further it also increased the ceiling interest rate on the lines of credit with overseas banks from 6-months LIBOR plus 100 basis points to 6-months LIBOR plus 250 basis points.

The S&P CNX Nifty is currently trading at 5,009.65, lower by 58.85 points or 1.16% after trading as high as 5,059.10 and as low as 4,990.65. There were 11 stocks advancing against 39 declines on the index.

The top gainers on the Nifty were M&M up 1.49%, ONGC up 1.33%, R Com up 1.03%, Cipla up 0.99% and Bharti Airtel up 0.85%.

BHEL down 6.43%, SAIL down 5.66%, JP Associates down 5.42%, BPCL down 5.26% and Siemens down 5.01% were the major losers on the index.

Asian markets traded on a pessimistic note, Shanghai Composite nosedived 2.72%, Hang Seng plunged 2.64%, Jakarta Composite sank 1%, KLSE Composite shed 0.30%, Nikkei 225 slipped 0.92%, Straits Times declined 1.14%, Seoul Composite shaved-off 1.59% and Taiwan Weighted slumped 1.38%.