Benchmarks slump to intra-day low in afternoon session

Indian equity benchmarks slumped deep into the red in the afternoon session as the RBI failed to meet market expectation of easing liquidity. The central bank announced high inflation a cause for concern and made a sharp cut in Marginal Standing Facility (MSF) rate by 75 basis points to 9.5%, while, the repo rate has been increased by 25 basis points 7.5%. The RBI move offset the recent market gains that banked on the US Fed's step, which maintained a status quo on QE tapering. Selling was witnessed in all indices except IT. Rate sensitive sectors such as real estate, and banking were trading over 6% lower on BSE. On stock specific movement, Wipro, Sun Pharma and TCS were trading up; while, HDFC Bank, SBI and L&T were trading lower by over 5 percent on BSE. The market breadth remained negative, out of 2,020 stocks traded, 566 stocks advanced, while 1353 stocks declined on the BSE. On global front, Asian equity indices were trading in red with Nikkei 225 was down by 0.16% and Straits Times down by 0.39% as investors in the Asia-Pacific region remained cautious over the U.S. Federal Reserve's policy outlook.

The BSE Sensex is currently trading at 20,071.30 down by 575.34 points or 2.79% after trading in a range of 20,677.99 and 20,051.43. There were only 3 stocks advancing against 27 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.89%, while Small cap index down by 1.06%.

The only gaining sectoral indice on the BSE was IT up by 0.06%, while Realty down by 6.92%, Bankex down by 6.37%, Capital Goods down by 4.02% and PSU down by 3.30% were remained the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.10%, Sun Pharma up by 0.99% and TCS up by 0.29%. On the flip side, HDFC Bank down by 6.54%, SBI down by 5.57%, L&T down by 5.53%, ICICI Bank down by 5.20% and Maruti Suzuki down by 4.40% were the only losers on the Sensex.

Meanwhile, as per the Apparel Export Promotion Council (AEPC), Indian apparel industry is witnessing an upswing and the exports are likely to go up to $17 billion in the next two years from $13 billion last year on the back of economic recovery in the US and Europe markets, which represent around 65 percent share in the country's total apparel exports. Indian apparel exports have picked up in the last six months as compared to negative growth in the previous two years.

Chairman of Apparel Export Promotion Council (AEPC), A Sakthivel said that the orders that went to neighbouring countries came to India due to industry compliance issues in those nations. On the other hand, Indian apparel industry is compliance-oriented, which has resulted into rise in domestic business. By adding further, Sakthivel said that current scenario looks good for Indian apparel exports and the other factors like depreciation of rupee is also helping the industry to a certain extent. Meanwhile, manufacturing cost of the sector is also going up simultaneously due to rupee depreciation as it imports large quantities of raw material to make items for export purposes, he added.  

Regarding the competition from China, A Sakthivel said that Chinas is one of the biggest competitors for India but the industry manufacturing cost has gone up over the years in that  country. The domestic industry consist a key player in cotton apparel exports and is known for value added exports like embroidery sequence and especially ladies wear. The neighboring countries are not as much competitive in this segment. So far, this year, Indian apparel industry grew by average growth rate of 14 percent.

The CNX Nifty is currently trading at 5,945.00 down by 170.55 points or 2.79% after trading in a range of 6,130.95 and 5,936.90. There were only 6 stocks advancing against 44 declines on the index.

The top gainers of the Nifty were HCL Tech up by 2.05%, Lupin up by 1.60%, Power Grid up by 1.05%, Sun Pharma up by 1.04% and Ultra Tech Cement up by 0.33%. On the flip side, DLF down by 10.24%, PNB down by 9.13%, Indusind Bank down by 8.74%, IDFC down by 8.14% and JP Associates down by 7.08% were the major losers on the index.

The most of the Asian equity indices were trading in red; Nikkei 225 was down by 0.16%, Straits Times down by 0.41%, Jakarta Composite down by 1.34%, Seoul Composite down by 0.39% and Taiwan Weighted down by 0.49%. While, Shanghai Composite up by 0.29%, KLSE Composite up by 0.49% and Hang Seng up by 1.67%.