Benchmarks continue to languish in red; Nifty wanders sub 5200 mark

With no efforts of recovery in sight, benchmark equity indices continue to languish in red with colossal loss of over a percent and half in the early afternoon deals. In the backdrop of pessimistic global set-up, local equities continued to get battered as investors resorting to safer instruments are visibly booking profits on every possible occasion. Rupee’s inexorable slide to historic lows of ‘68/$’ is mainly denting investors sentiment.

Meanwhile, sliding for third successive session, Indian rupee after opening the session at 67.06, has now hit historic lows of ‘68/$’ on growing concerns over increase in government's subsidy burden following the passage of the food security bill and, uncertainty over a possible US led military strike against Syria.  Both Sensex and Nifty, gradually losing ground are trading below the psychological 17,700 and 5,200 levels respectively. Meanwhile, broader indices, incurring deeper cuts in comparison to larger peers, are trading with deeper cuts of over two percent.

On the global front, Jitters over a possible US-led military strike against the Syrian government knocked Asian equities to a seven-week low on Wednesday and pushed oil prices and safe-haven gold to multi-month highs. Meanwhile, European shares too reflecting the downtrend of Asian counterparts, have got off to a tepid start.

Closer home, Information Technology and Technology counters are only safe spaces, where investors have pumped their money, while Public Sector Undertaking, Realty and Oil & Gas counters are the worst hit of the session. The overall market breadth on BSE is in the favour of declines which are outnumbering advances in the ratio of 1401:492; while 120 shares remain  unchanged.

The BSE Sensex is currently trading at 17647.53, down by 320.55 points or 1.78% after trading in a range of 17851.44 and 17448.71. There were only 9 stocks advancing against 21 declines on the index.

The broader indices continued to slide further; the BSE Mid and Small cap indices were trading down by 2.35% and 1.61% respectively.

The top gaining sectoral indices on the BSE were, IT up by 2.07% and Teck up by 0.89%. While, PSU down by 4.59%, Realty down by 4.33%, Oil and Gas down by 4.26%, Bankex down by 3.82% and Capital Goods down by 2.78%, were the top losers indices on the BSE.

The top gainers on the Sensex were, TCS up by 3.23%, Wipro up by 2.25%, Infosys up by 1.57%, Tata Power up by 0.87% and Jindal Steel up by 0.85%. On the flip side, ONGC down by 9.18%, HDFC down by 7.45%, Gail India down by 6.09%, Coal India down by 5.67% and Mahindra and Mahindra down by 4.63% were the top losers on the Sensex.

Meanwhile, concerned over the widening current account deficit (CAD) of the country, Commerce and Industry Minister Anand Sharma suggested with an off-beat idea that the government can use a fraction of its gold reserves in order to contain high CAD. Anand Sharma said that at present the country has over 31,000 tonnes of declared gold reserve and if 500 tonnes is monetized at current value, then it will help to contain a large part of country widening CAD. At current market rates, 500 tonnes of gold is valued at about $25 billion.

India’s CAD widened to a record high of 4.8 percent of GDP in the previous fiscal on account of high gold imports and crude oil prices. During April to July, the country’s gold imports rose 87 percent to 383 tonnes despite a large number of steps taken by the government and the Reserve Bank of India (RBI) to curb demand for the yellow metal. The government recently raised customs duty on gold to 10 percent from 8 percent earlier.

Meanwhile, the government has set target to contain the CAD at 3.7 per cent of GDP in the current fiscal, however achieving this target seems to be a difficult task with a hoard of obstacles such as high inflation, depreciating rupee, and slowing down economy.

The CNX Nifty is currently trading at 5,183.75, down by 103.75 points or 1.96% after trading in a range of 5,236.05 and 5,118.85. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were Cairn India up by 5.59%, TCS up by 3.36%, Ranbaxy up by 2.57%, IDFC up by 1.71% and Infosys up by 1.67%. On the flip side, ONGC down by 9.10%, BPCL down by 8.05%, HDFC down by 7.59%, Axis Bank down by 7.41% and Asian Paints down by 6.71% were the major losers on the index.

The Asian equity indices were trading in mixed; Straits Times down by 1.36%, KLSE Composite down by 1.36%, Seoul Composite down by 0.07%, Hang Seng down by 1.60%, Nikkei 225 down by 1.51% and Jakarta Composite down by 2.14%. While, Shanghai Composite up by 0.03% and Taiwan Weighted up by 0.05%.

European shares got off to a tepid start; with CAC declining by 0.25%, DAX sliding by 0.28% and FTSE 100 losing 0.79%.