Benchmarks extend losses; Sensex plunges over 200 points

Indian equity benchmarks extended losses and reached at their intra-day low level in the afternoon session on account of selling pressure witnessed in banking and metal stocks. Investors remained on sidelines ahead of current account deficit (CAD) data to be released by Reserve Bank of India (RBI) later in the day, which may have widened to above 5% of Gross Domestic Product (GDP). Investor sentiments were down after the RBI report based on abridged financial results of 2,768 listed non-government non-financial (NGNF) companies, stated that listed non-financial private firms have posted 10.9 percent decline in net profit in the first quarter of the current fiscal. Further, fall in rupee value against dollar and weak Asian cues also added to the pessimistic sentiments. Selling was also witnessed in PSU, Power and Auto stocks. On stock specific movement, Hindustan Unilever, Wipro and Infosys were trading up by over 0.8 percent; while, Tata Steel, Bharti Airtel and BHEL were trading lower by over 3 percent on BSE.

On global front, Asian equity indices fell with Japanese index Nikki 225 down by 2.06% on concern the US government is headed for a shutdown amid a budget stalemate. Back home, the market breadth remained negative, out of 1,868 stocks traded, 745 stocks advanced, while 1026 stocks declined on the BSE.    

The BSE Sensex is currently trading at 19,506.96 down by 220.31 points or 1.12% after trading in a range of 19,651.31 and 19,474.86. There were only 4 stocks advancing against 26 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index down by 0.28%.

The gaining sectoral indices on the BSE were IT up by 0.65%, Teck up by 0.02%. While, Metal down by 2.16%, PSU down by 2.13%, Power down by 2.07% and Bankex down by 1.99% were remained the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.39%, Wipro up by 0.98%, Infosys up by 0.97% and Bajaj Auto up by 0.32%. On the flip side, Tata Steel down by 5.26%, Bharti Airtel down by 3.81%, BHEL down by 3.79%, ONGC down by 2.95% and ICICI Bank down by 2.95% were the only losers on the Sensex.

Meanwhile, amid rising concerns over the prevailing economic slowdown, Planning Commission, in its mid-term review of the five year policy document, is likely to cut Indian annual average economic growth rate target to around 6 to 6.5 percent for the 12th Five-Year Plan (2012-17) from 8 percent projected earlier.

Planning Commission is of the view that owing to the ongoing economic downturn, it would be difficult to achieve the 8 percent average economic growth in the 12th Plan period. The Indian economy grew by average rate around 5 percent in first two years of the Plan, therefore, the country has to maintain a rate of around 10 percent in remaining three financial years of policy period to achieve the targeted 8 percent, which is almost impossible. Earlier, in its last mid-term review for the 11th Five-Year Plan, the Commission had cut the annual average growth rate target of 9 percent to 8.2 percent. However, only 8 percent average annual economic growth was achieved during the previous five-year plan.

At present, Indian economy is struggling with slowdown and first April-June quarter growth slowed down to four year low at 4.4 percent. Further, all macro-economic indicators have deteriorated with current account deficit (CAD) widened to a record high of 4.8 per cent of GDP in the previous fiscal. Further, rupee value has depreciated over 13 percent against dollar in 2013, which has become a cause of concern for the country, as India is structurally an import intensive country.

The CNX Nifty is currently trading at 5,767.80 down by 65.40 points or 1.12% after trading in a range of 5,810.20 and 5,757.45. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were HCL Tech up by 1.60%, BPCL up by 1.42%, Lupin up by 1.38%, Hindustan Unilever up by 1.34% and Infosys up by 0.94%. On the flip side, Tata Steel down by 5.13%, NMDC down by 4.06%, Bharti Airtel down by 3.84%, BHEL down by 3.84% and JP Associates down by 3.28% were the major losers on the index.

The Asian equity indices were trading in red; Straits Times down by 0.57%, Jakarta Composite down by 1.59%, Seoul Composite down by 0.74%, KLSE Composite down by 0.71%, Taiwan Weighted down by 0.69%, Hang Seng down by 1.31% and Nikki 225 down by 2.06%. While, Shanghai Composite up by 0.11%.