Markets continue to reel under pressure in noon deals

Indian equity benchmarks continued to reel under pressure in noon deals as investors continue to sit on sidelines ahead of CAD number, which will be released by Reserve Bank of India (RBI) later in the day, which may have widened to 4 percent of GDP in the first quarter due to a surge in gold imports and a deteriorated trade gap. Depreciation in rupee to weighing the sentiments as Indian rupee was trading at 62.80/81 per dollar in noon deals as compared to its Friday close at 62.51/52 per dollar. The sentiments also remained dampened on report that foreign institutional investors (FIIs) sold shares worth a net Rs 244.95 crore on September 27, 2013.

Global cues too remained sluggish with European markets opening in the red with CAC, DAX and FTSE all trading with a cut of around a percentage point. Moreover, most of the Asian markets were trading in the red at this point of time on concern the US government is headed for a shutdown amid a budget stalemate. In addition, weaker than expected local industrial production data of Japan also weighed on investor sentiment. Industrial production in Japan fell a seasonally adjusted 0.7 percent in August compared to the previous month.

Back home, realty stocks extended previous session’s losses triggered by RBI’s governor Raghuram Rajan’s comments that the RBI is still worried about high inflation, even when taking out volatile food prices. Selling was both brutal and wide based as, barring software and technology, none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include capital goods, public sector undertaking, metal, banking and power. The broader indices too were struggling to get some traction, while the overall market breadth on BSE is in the favour of decliners which have thumped advances in the ratio of 1181:745; while 114 shares remained unchanged.

The BSE Sensex is currently trading at 19467.73 down by 259.54 points or 1.32% after trading in a range of 19651.31 and 19461.83. There were 6 stocks advancing against 24 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.57%, while Small cap index also down by 0.56%.

The gaining sectoral indices on the BSE were IT up by 0.63% and Teck up by 0.03%. While, Metal down by 2.71%, PSU down by 2.61%, Metal down by 2.55%, Bankex down by 2.40% and Power down by 2.28% were remained the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.37%, Wipro up by 1.02%, Infosys up by 0.79%, Bajaj Auto up by 0.39% and Sun Pharma up by 0.13%. On the flip side, BHEL down by 5.35%, Tata Steel down by 5.25%, Coal India down by 4.05%, ONGC down by 3.50% and ICICI Bank down by 3.50% were the top losers on the Sensex.

Meanwhile, in a move to contain the county’s fiscal deficit within the target limit, the government will restart its disinvestment programme in the month of October. The government had put on hold its disinvestment programme amid concerns over weakening rupee and tapering of the quantitative easing (QE) in the US. At present, disinvestment proceeds are of great importance to the government as it has set target to contain fiscal deficit at 4.8 percent of GDP in the current financial year. However, the government is likely to scale back the disinvestment target for the current fiscal by 10,000 crore to 30,000 crore.

As per the government’s disinvestment plan, 10% stake sale in Indian Oil Corporation (IOC) will start in the first week of October and the offer-for-sale could be wrapped by next month. The government expects to raise around 5,000 crore from IOC issue. The government will disinvestment 4% stake sale in Power Grid Corporation and 10% in Engineers India Limited through a follow-on offer before December 15, helping it to raise around 3,000 crore from these two issues. Further, disinvestment will also take place in Coal India, NHPC Limited and NMDC Limited, which will help the government to raise around 12,000 crore.

So far this fiscal, the government has raised only Rs 1,325 crore by divesting stake in public sector undertakings include Neyveli Lignite Corporation (NLC), State Trading Corporation (STC), MMTC, and ITDC. The government has raised Rs 23,920 crore through disinvestment in the previous fiscal.

The CNX Nifty is currently trading at 5,757.70 down by 75.50 points or 1.29% after trading in a range of 5,810.20 and 5,751.70. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were HCL Tech up by 1.59%, Hindustan Unilever up by 1.43%, Lupin up by 1.38%, Wipro up by 0.80% and BPCL up by 0.79. On the flip side, BHEL down by 5.39%, Tata Steel down by 5.20%, NMDC down by 4.65%, Coal India down by 3.84% and JP Associates down by 3.69% were the major losers on the index.

Most of the Asian equity indices were trading in red; Straits Times down by 0.81%, Jakarta Composite down by 1.62%, Seoul Composite down by 0.74%, KLSE Composite down by 0.27%, Taiwan Weighted down by 0.69%, Hang Seng down by 1.25% and Nikki 225 down by 2.06%, while Shanghai Composite up by 0.54%.

All the European markets were trading in red; France’s CAC 40 was down by 0.93%, UK’s FTSE 100 down by 0.90% and Germany’s DAX down by 1.11%.