Benchmarks extend losses in afternoon session

Indian equity benchmarks extended their early losses and reached at their intra-day low level in the afternoon session amid selling in risk sensitive stocks like banking, realty and auto as investors remained concerned after the RBI hiked repo rate by 25 basis points to 7.50 percent on Friday. Sentiments were also dented by the global rating agency Fitch, which cut its growth forecast for India in 2013-14 to 4.8%, from its earlier estimate of 5.7%. Further, fall in rupee value also added to the pessimistic sentiments. Selling was witnessed in power, oil and gas and FMCG stocks. On stock specific movement, Wipro, Sesa Goa and Hero Moto Corp were trading up by over 1.5 percent; while, SBI, Bharti Airtel and ICICI Bank were trading lower by over 3.50 percent on BSE. The market breadth remained negative, out of 1,944 stocks traded, 779 stocks advanced, while 1039 stocks declined on the BSE.

On global front, Asian equity indices were trading mixed. China’s Shanghai Composite index was up by 1.05%, as Chinese factory output expanded for a second month in September. HSBC manufacturing purchasing managers index for China rose to 51.2 in September from 50.1 in August.

The BSE Sensex is currently trading at 19,995.92 down by 267.79 points or 1.32% after trading in a range of 20,199.81 and 19,926.38. There were only 9 stocks advancing against 21 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.67%, while Small cap index down by 1.14%.

The gaining sectoral indice on the BSE were Consumer Durables up by 1.43%, IT up by 1.37% and Teck up by 0.73%. While Bankex down by 3.66%, Realty down by 2.65%, Capital Goods down by 2.00% and PSU down by 1.75% were remained the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.36%, Sesa Goa up by 1.65%, Hero Moto Corp up by 1.55%, Infosys up by 1.09% and Cipla up by 0.95%. On the flip side, SBI down by 4.10%, Bharti Airtel down by 3.59%, ICICI Bank down by 3.58%, Maruti Suzuki down by 3.35% and HDFC down by 3.29% were the only losers on the Sensex.

Meanwhile, Foreign direct investment (FDI) into Indian services sector declined by 36.5 percent to $1.02 billion during the April-July, 2013 as against $1.64 billion received in same period last year. In FY13, foreign investment in services fell by 7.29 percent to $4.83 billion from $5.21 billion in FY12.

The services sector, which includes banking, insurance, outsourcing, courier and technology testing represent around 60 percent share in Indian GDP. The declined FDI in the sector was mainly due to the factors like lack of financial reforms, restrictions on outsourcing to India by developed economies, inconsistencies in policies and political uncertainties, impacting sentiments of foreign investors. However, country’s overall FDI has grown by 20 percent to $7.05 billion during the April-July, 2013 from $5.90 in the corresponding period of last year.

Meanwhile, the government has taken several policy decisions to attract foreign investments including allowing FDI in multi-brand retail, telecoms and civil aviation sectors. Presently, the government is also considering raising the FDI cap in the insurance sector to 49 per cent from 26 per cent. Meanwhile, India would require around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Further, a rise in FDI will help support the rupee, which recently depreciated to record low of over 68.50 against the US dollar.  The CNX Nifty is currently trading at 5,927.90 down by 84.20 points or 1.40% after trading in a range of 5,989.40 and 5,907.35. There were only 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were HCL Tech up by 3.20%, Sesa Goa up by 2.08%, Ranbaxy up by 1.86%, Hero Moto Corp up by 1.73% and Reliance Infra up by 1.43%. On the flip side, Bank of Baroda down by 5.51%, PNB down by 5.18%, Axis Bank down by 4.66%, SBI down by 4.15% and DLF down by 4.13% were the major losers on the index.

The most of the Asian equity indices were trading in red; Straits Times down by 0.72%, Jakarta Composite down by 1.10%, KLSE Composite down by 0.28% and Hang Seng down by 0.66%. While, Shanghai Composite up by 1.05%, Seoul Composite up by 0.19% and Taiwan Weighted up by 1.02%.