Benchmarks nurse heavy losses of over a percent

Benchmark equity indices continued to nurse heavy loss of over a percent as concerns over foreign investors reducing its purchases of the nation’s stocks as U.S. lawmakers remain deadlocked over extending the debt ceiling, continued to baffle investors. Meanwhile, expectation of subdued Q2 earning season being in the offing for Indian equity markets was also weakening the sentiment. Although, off day's low’s, 50 share index Nifty was trading below the psychological 5,850 level, while Sensex was trading above the crucial 19,700 level. However, broader indices continuing to outperform larger peers were trading with slender gains.

On the global front, in line with Asian peers, European stocks fell on Monday as a lack of progress in resolving U.S. government disputes over the federal budget and debt ceiling, dented confidence in the world's largest economy. U.S. Democrats and Republicans came no closer on Sunday to a budget agreement that would end a government shutdown, let alone reaching a deal on the U.S. borrowing limit by Oct. 17 to avoid a default.

Closer home, against subdued trend, stocks from Health Care, Information Technology and Metal counters were trading upbeat. While, those from Banking, Public Sector Undertaking and Realty counters were the prominent losers. Indian software services exporters attracted some buying on hopes that these firms are to gain additional business from their largest market, the United States, as a slew of regional banks there look to outsource more technology work than ever before. Nevertheless, expectation of good result from Infosys, also was firing up all the stocks from the sector. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1050:948; while 148 shares remained unchanged.

The BSE Sensex is currently trading at 19705.87 down by 210.08 points or 1.05% after trading in a range of 19,888.41 and 19,647.88. There were only 9 stocks advancing against 21 declines on the index.

The broader indices sustained their gains; the BSE Mid cap and Small cap indices were trading higher by 0.14% and 0.32% respectively.

The gaining sectoral indices on the BSE were Healthcare up by 0.76%, IT up by 0.40%, TECK up by 0.25% and Metal up by 0.09%. While, Bankex down by 2.69%, PSU down by 1.26%, Realty down by 1.13%, Capital Goods down by 1.12% and Oil and Gas down by 1.09% were the top losing indices on BSE.

The top gainers on the Sensex were Hindalco Inds up by 3.31%, Tata Steel up by 1.82%, Jindal Steel up by 0.99%, TCS up by 0.82% and Cipla up by 0.78%. On the flip side, ICICI Bank down by 3.27%, Coal India down by 3.13%, HDFC Bank down by 2.77%, HDFC down by 2.16% and L&T down by 2.05% were the losers on the Sensex.

Meanwhile, amid rising concerns over Indian gold imports, all India Gems & Jewellery Trade Federation (GJF) said that the country’s gold imports, witnessing contraction in the past few months, is expected to pick up and may touch 725 tonnes this fiscal. The GJF said that gold import is presently at a standstill, but it may pick up in the next three months till December to 150 tonnes mainly due to the festival season.

During April-September 2013, India imported 354 tonnes of gold, of which 118 tonnes came in April, 162 tonnes in May, 31 tonnes in June, 41 tonnes in July, 2 tonnes in August and nil in September. The decline in country’s gold imports in August and September months was mainly due to the steps taken by the government and the Reserve Bank of India.

India is the world largest consumer of the gold and country’s total yellow metal consumption is around 900 tonnes a year, of which 600 tonnes goes into manufacturing and 300 tonnes into investments. Rising gold imports has become a cause of concern for the country as it’s the second largest contributor to the widening current account deficit (CAD) of the country. India, battling with record trade deficit and weak currency, is trying to curb imports of dollar-denominated gold, most expensive non-essential item in its import bill. Recently, the government has hiked gold imports rates to 15% and central bank introduced 80/20 rule under which 20% of all gold imports has to be re-exported.

Meanwhile, in order to boost Indian gems and jewellary industry growth, GTF has proposed Rashtriya Swarna Nivesh scheme, an initiative which is expected to bring the idle gold back into circulation and the association is hopeful of receiving RBI and SEBI approval soon. As per the proposed scheme, GTF hopes to collect 400 tonnes of gold in FY’14

The CNX Nifty is currently trading at 5,845.90 down by 61.40 points or 1.04% after trading in a range of 5,895.25 and 5,825.85. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Hindalco up by 3.22%, Ranbaxy up by 2.28%, Tata Steel up by 1.92%, HCL Tech up by 1.80% and Lupin up by 1.35%, on the flip side, Coal India and ICICI Bank were  down by 3.29%, HDFC Bank down 87%, Kotak Bank down by 2.39% and Axis Bank down by 2.38% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite slipped by 0.32%, Seoul Composite dropped by 0.13%, Hang Seng slid by 0.53%, Nikki 225 plunged 1.22%, KLSE Composite down by 0.11% and Taiwan Weighted declined by 0.37%. While, Straits Times up by 0.03% was the lone gainer amongst Asian pack.

European markets got off to a negative start; with CAC 40 declining by 0.95%, DAX plunging by 1.10% and FTSE 100 losing 0.78%