Weakness persist in market; Sensex collapse over 260 points

Indian equity benchmarks extended their early losses following Asian bourses where the mood is fairly bearish on worries about the economic situation in the US and Europe. Investors continued selling as concerns about India Inc's declining margins and fears of a further slowdown in industrial growth weighed on their sentiment. Volatility in the rupee was another cause of concern for the market, which slipped to Rs 52.11 to a dollar, though there was some recovery in the domestic currency as banks started selling dollar. The Sensex plunged more than 260 points, while Nifty was trading near days low. On sectoral front bank stocks were among the worst hit in the sell-off. Oil, information technology, automobile, power and metal stocks too were treading in negative territory with notable losses. FMCG, capital goods and PSU stocks pared early gains. While, Consumer Durables stocks were finding some support. On the global front most of the Asian markets continued trading in red. Back home, the market breadth favoured the negative trend; there were 767 shares on the gaining side against 1596 shares on the losing side while 100 shares remained unchanged.

The BSE Sensex is currently trading at 15,801.29, down by 264.13 points or 1.64%. The index has touched a high and low of 15,969.60 and 15,793.61 respectively.There were only 4 stocks advancing against 26 declining ones on the index.

Selling pressure apparently has even accentuated in broader space as BSE Mid cap and Small cap indices declined lower by 1.02% and 0.84% respectively.

Bankex down by 2.10%, Oil & Gas down by 1.77%, TECk down by 1.73%, IT down by 1.68% and Metal down by 1.67% were the top losers on BSE Sectoral space. On the flip side Consumer Durable (CD) up by 0.30% was the only gainer on the space.

HDFC Bank down by 3.36%, Mahindra & Mahindra down by 3.18%, Jindal Steel down by 2.91%, Bharti Airtel down by 2.72% and Jaiprakash Associates down by 2.52% were the top losers on Sensex.

Meanwhile, the top resilient stocks among 30 share index-Sensex- were Cipla up by 0.78%, Maruti Suzuki up by 0.54, Sun pharma up by 0.53% and L&T up by 0.22%.

Moreover, in the wake of recent decline of Indian rupee against American dollar, the ministry of petroleum wants Rs 56,600 crore more in cash subsidy to partially compensate the government owned oil marketing companies for losses they incur on selling fuel below market cost.

G C Chaturvedi, Oil Secretary said that “at the current rates, under-recoveries (revenue loss) of oil marketing companies (OMCs) in the current fiscal is likely to be of the order of Rs 1,30,000 crore.”The Oil Ministry wants the share of upstream companies like Oil and Natural Gas Corp (ONGC) to be limited to one-third of this revenue loss, or Rs 43,329 crore. “We would like their share to be one-third. The rest we want the Finance Ministry to bear,” Chaturvedi said.

In the first half of the current financial year, the upstream companies ONGC, Oil India and GAIL bore one-third of the Rs 64,900 crore revenue losses on fuel sale. The finance ministry only gave Rs 30,000 crore and rest was borne by oil refiners, Indian Oil, Bharat Petroleum and Hindustan Petroleum. In the first half of 2011-12, the OMCs have suffered revenue loss of Rs 64,900 crore on selling diesel, kerosene and domestic cooking gas below market price.

Presently, OMCs are losing Rs 11.44 per litre on diesel, Rs 26.94 per litre on kerosene sold via the public distribution system (PDS) and Rs 260.50 per 14.2kg LPG cylinder supplied to domestic households for cooking purposes. As a result, the OMCs are incurring a daily revenue loss of around Rs 360 crore on sale of these three petroleum products. If the prices of these products are not revised, then by the end of the 2011-12, OMCs are expected to incur revenue loss of around Rs 130,000 crore.

The S&P CNX Nifty is currently trading at 4,737.00, down by 75.35 points or 1.57%. The index has touched a high and low of 4,779.50 and 4,732.90 respectively. There were just 7 stocks advancing against 42 declining ones on the index, while one remained unchanged. 

Sesa Goa down by 4.08%,  Jindal Steel down by 3.50%, HDFC Bank down by 3.45%, M&M down by 3.25% and Siemens down by 3.08% were the top losers of the broadly followed 50 share index- Nifty.

On the flip side, Reliance Communication up by 2.43%, Gail India up by 1.63%, Dr Reddy up by 0.64%, Cipla up by 0.51% and Sun Pharma up by 0.46% were the gainers of the index.

All the Asian markets were trading in the red; Shanghai Composite declined 0.59%, Hang Seng lost 1.99%, Jakarta Composite plunged 1.44%, KLSE Composite slid 0.77%, Straits Times descended 1.53%, Seoul Composite plummeted 2.08% and Taiwan Weighted knocked off 2.77%.

Moreover, Japanese markets- Nikkei 225- remained closed for the trade on Wednesday on account of Labor Thanksgiving day.