Benchmarks nose-dives to day’s low tailing negative European markets’ start

Benchmarks have extended losses tailing the negative start of European markets, which adding to the negative triggers for local equity markets have dragged them to day’s lowest point. Absence of positive catalyst for local markets combined with prevailing caution ahead of US jobs data later in the day is mainly keeping investors on the sidelines. Trading near day’s low, Sensex and Nifty are languishing below the psychological 20,850 and 6,200 levels respectively, with loss of over quarter of a percent.

On the global front, European shares, pulling back from five-year highs set in the previous session after eight straight days of gains, are trading mostly negative ahead of U.S. jobs data. September's non-farm payrolls data, released on Tuesday after a delay due to the partial government closure, is likely to offer clues on the strength of the economic recovery, and thus on how long the Fed might maintain its easy policy stance.

Closer home, stocks from Oil & Gas, Auto and Realty counters are underpinning the underlying weakness of the bourses, while those from Power, Information Technology and Public Sector Undertaking are moving against the negative trend. Meanwhile, sugar stocks, namely, Shree Renuka Sugars, Bajaj Hindusthan, Balrampur Chini and Mawana Sugars were trading sweet after the sugar production dropped by 4.5% to 25.14 million tonnes in 2012-13. Additionally, Rupee’s weakness to a week’s low level lifted IT pivotal higher. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1229:961; whole 149 shares remained unchanged.

The BSE Sensex is currently trading at 20831.17, down by 62.72 points or 0.30% after trading in a range of 20948.91 and 20812.84. There were 12 stocks advancing against 17 declines on the index.

The broader indices continued to outperform the benchmarks; the BSE Mid and Small cap indices were trading higher by 0.51% and 0.71% respectively.

The gaining sectoral indices on the BSE were Power up by 0.80%, IT up by 0.54%, PSU up by 0.44%, TECK up by 0.40% and Capital Goods up by 0.33%. On the other hand, Oil & Gas down by 0.47%, Auto down by 0.34%, Realty down by 0.30% and Fast Moving Consumer Goods down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.69%, Wipro up by 1.43%, Tata Power up by 1.19%, Tata Steel up by 1.12% and  Gail India up by 1.04%. On the flip side, HDFC down by 2.20%, Hero MotoCorp down by 1.91%, RIL down by 1.35%, Hindalco Industries down by 1.31% and Cipla down by 0.99% were the major losers on the Sensex.

Meanwhile, at the pre-monetary policy meeting held by the RBI, Confederation of Indian Industry (CII) has sought easing of interest rates and liquidity and has suggested that the RBI sends out a signal in the forthcoming policy announcement that there would be no further tightening and the Central Bank would start to move to a more accommodative monetary stance.

The Industry body raised their demand at a meeting with RBI governor Raghuram Rajan, who is due to announce his first half-yearly monetary policy on October 29. CII has also suggested that a separate window be opened by RBI for SME financing to ensure the availability of credit at affordable rates to this important sector.

The apex association has also suggested that exports be provided priority sector lending status, at this time and asked the RBI to support the infrastructure sector through easing of norms. For this CII has suggested that the RBI consider forbearance for financing already made available to the infrastructure sector.

The other body Assocham had released a 10-point agenda and said that the central bank should consider normalising the monetary policy after a series of interest rate and liquidity tightening measures.

The CNX Nifty is currently trading at 6,190.65, down by 14.30 points or 0.23% after trading in a range of 6,220.10 and 6,181.80. There were 23 stocks advancing against 26 declines on the index, while one stock remained unchanged.

The top gainers of the Nifty were PowerGrid up by 2.66%, HCL Technologies down by 1.76%, Coal India up by 1.70%, Tata Steel up by 1.64% and Wipro up by 1.58%. On the flip side, HDFC down by 2.29%, Ambuja Cement down by 2.22%, Hero MotoCorp down by 1.99%, ACC down by 1.43% and DLF down by 1.41% were the major losers on the index

Most of the Asian equity indices were trading in red; Shanghai Composite declined 0.96%, Hang Seng lost 0.45%, Jakarta Composite tumbled  by 1.38%, KLSE Composite was down by 0.05%, and Taiwan Weighted was down by 0.01%. On the other hand, Nikkei 225 was up by 0.13%, Straits Times was up by 0.35% and Seoul Composite gained 0.15%.

European markets got off to a negative start; with CAC 40 declining by 0.21%, DAX losing 0.10%, while FTSE 100 was trading higher by 0.11%.