Local equity markets languish near day’s low; Nifty slips below 6,150 level

Local equity markets are languishing near day’s low tailing a weaker start of European markets, which adding to the pessimistic environment, are increasingly underpinning investors to square off their position in risky equities in absence of any positive catalyst. Much of the drubbing is coming from stocks belonging to Realty, Auto and Information Technology counters, which emerging as top BSE sectoral indices, are endorsing the underlying weakness of the bourses. While, Realty stocks witnessed strong demand on renewed buying activities in previous trading session, were down today on accentuated selling pressure. The drag of Information Technology pivotal came on the back of Wipro’s losses which were mainly on account of company’s second quarter revenue performance in dollar terms.  Trading at day’s low, while Sensex was trading lower below the crucial 20,700 mark with loss of over 3/ 4 of a percent, Nifty was holding above the crucial 6,150 level. Meanwhile, broader indices too succumbed to profit-booking. On the global front, European shares got off to a weak start following a mixed batch of company reports, with airlines the top fallers after weak results from Germany's Lufthansa. Meanwhile, Asian pacific shares continued to mostly trade in red terrain.

Closer home, the BSE Sensex is currently trading at 20687.56, down by 177.41 points or 0.85% after trading in a range of 20922.32 and 20659.95. There were only 8 stocks advancing against 22 declines on the index. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 766:1063; while 20 shares remained unchanged. 

The broader indices too succumbed to selling pressure; the BSE Mid cap and Small cap indices were trading lower by 0.14% and 0.30% respectively

The top losing sectoral indices on the BSE were Realty down by 1.70%, Auto down by 1.48%, Information Technologies down by 1.48%, Teck down by 1.37% and Power down by 1.08%. On the other hand, Consumer Durables and Bankex were up by 0.16% were the only gaining sectoral indices on the BSE

The top gainers on the Sensex were Gail India up by 4.11%, SBI up by 2.03%, Cipla up by 1.50%, SSLT up by 1.18% and Tata Power up by 1.04%. On the flip side, Wipro down by 4.48%, Tata Motors down by 2.86%, Bajaj Auto down by 2.17%, Dr Reddy’s down by 1.94% and NTPC down by 1.89% were the major losers on the Sensex.

Meanwhile,  Finance minister P Chidambaram, after reviewing the performance of public sector banks, has allowed the government to infuse the budgeted Rs 14,000 crore of bank capitalization through preferential allotment. However, the minister ruled out the possibility of the government diluting its shareholding in the state-run banks.

This development is complete contradiction to Reserve Bank of India’s suggestion of government diluting ownership in Public State Banks even below 51% as an option for raising funds and easing fiscal burden, with government maintaining of keeping its stake in state-run banks at 58%.

Further, the minister has left it on the bank’s board to decide upon the issue of raising capital from the markets through qualified institutional placement (QIP) or other routes, which would be in addition to the capital infusion by the government. This development comes on the heels of the country's biggest lender, State Bank of India mulling raising 8,000 crore through the QIP route. The bank, in which government holds 62.31% stake, is expected to take a call on this within a month.

The CNX Nifty is currently trading at 6,150.55, down by 52.25 points or 0.84% after trading in a range of 6,217.95 and 6,140.35. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were GAIL up by 4.15%, Bank of Baroda up by 2.98%, SBI up by 2.14%, Cipla up by 1.58% and Punjab National Bank up by 1.18%. On the flip side, Wipro down by 4.50%, DLF down by 3.20%, JP Associates down by 3.15%, Tata Motors down by 2.76% and Cairn India down by 2.63% were the major losers on the index

Majority of the Asian equity indices were trading in red; Shanghai Composite plunged by 1.29%, Hang Seng lost 0.66%, Nikkei 225 slumped by 1.95%, Seoul Composite declined 0.99% and Taiwan Weighted was down by 0.29%.

On the flip side, Jakarta Composite surged by 0.94%, KLSE Composite added 0.66% and Straits Times was modestly up by 0.10%.  

European shares got off to a negative start; with CAC 40 declining by 0.68%, FTSE 100 declining by 0.44% and DAX slipping by 0.40%.