Markets lose some more ground; Nifty breaches 5,900 mark

Losing some more ground, Indian equity benchmarks were reeling under immense selling pressure in noon deals with frontline gauges declined below their crucial 5,900 (Nifty) and 19,900 (Sensex) levels, pressurized by rate-sensitive shares amid looming fear of another hike in repo rates by the Reserve Bank of India. Global cues too remained choppy with European markets viz. CAC, DAX and FTSE all were trading lower in early deals. Moreover, most of the Asian markets were trading in the red terrain at this point of time as investors remained wary ahead of readings on manufacturing across Europe, which are due, later on Monday. Though, Chinese markets garnering over a percent gain after flash HSBC Purchasing Managers’ Index (PMI) of the country climbed to 51.2 in September, from August’s 50.1, with 10 out of 11 sub-indices up in the month.

Back home, the weakness in rupee continued in afternoon trade amid month-end dollar demand from importers. Sentiments also remained dampened after Fitch Ratings cut its growth forecast for India in 2013-14 to 4.8%, from its earlier estimate of 5.7% made in June and 7% in September. Further, the agency also slashed India's growth rate projection for FY’15 to 5.8% from the June’s forecast of 6.5%, against its projection of 7.5% in September, 2012.

Bucking the trend, shares of some jewellery makers are in limelight and trading higher on hopes of strong demand ahead of festival season. On the sectoral front, software witnessed the maximum gain in trade followed by consumer durables and technology, while banking, realty and capital goods remained the top losers on the BSE sectoral space. The broader indices too were trading in the red terrain, while the overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1121:775; while 136 shares remained unchanged.

The BSE Sensex is currently trading at 19898.13 down by 365.58 points or 1.80% after trading in a range of 20199.81 and 19887.58. There were only 6 stocks advancing against 24 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.13%, while Small cap index also down by 0.43%.

The gaining sectoral indice on the BSE were IT up by 1.13%, Consumer Durables up by 1.01% and Teck up by 0.56%. While Bankex down by 4.16%, Realty down by 3.65%, Capital Goods down by 2.70%, PSU down by 2.38% and Oil & Gas down by 1.99% were remained the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.37%, Sesa Goa up by 1.93%, Infosys up by 0.80%, Hindalco Industries up by 0.44% and TCS up by 0.37%. On the flip side, SBI down by 5.01%, ICICI Bank down by 3.88%, HDFC down by 3.87%, Maruti Suzuki down by 3.82% and ONGC down by 3.65% were the top 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 5,890.90 down by 121.20 points or 2.02% after trading in a range of 5,989.40 and 5,890.85. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were HCL Tech up by 2.72%, Sesa Goa up by 1.63%, Ranbaxy up by 1.62%, Ranbaxy up by 1.63% and Infosys up by 0.87%. On the flip side, Bank of Baroda down by 6.72%, PNB down by 6.62%, DLF down by 5.68%, Axis Bank down by 5.38% and SBI down by 5.15% were the major losers on the index.

The most of the Asian equity indices were trading in red; Straits Times down by 0.70%, Jakarta Composite down by 1.04%, KLSE Composite down by 0.31% and Hang Seng down by 0.76%. While, Shanghai Composite up by 1.30%, Seoul Composite up by 0.19% and Taiwan Weighted up by 1.02%.

All the European markets were trading in red; France’s CAC 40 was down 0.16%, UK’s FTSE 100 dropped 0.17% and Germany’s DAX down by 0.04%.