Markets extend their plunge on Thursday morning

Indian markets are unable to get any respite after a sharp slump in last session, have furthered their losses in the morning trade on Thursday. The domestic markets taking cues from the regional counterparts made a soft start as there were once again talks of US Fed’s stimulus tapering after minutes of Federal Reserve October monetary meeting signaled the central bank was on track to slow down its bond-buying program. On the domestic front too, there was not much that could have supported the markets from the free-fall. The weakness in rupee which once again seemed approaching 63/$ mark tailing the fall in emerging market currencies, was adding pressure to the markets downtrend. The high fliers of last session, sugar stocks are giving mixed response and some of them have started paring gains as the informal meeting of key UPA ministers to discuss relief measures for sugar mills ended without any decision and the finance minister said that the Cabinet will take a decision next week on the sugar issue. All the 13 sectoral indices on the BSE were trading in red, however banking, realty, FMCG and power were suffering maximum losses of over a percent.

The market breadth on the BSE was negative; there were 433 shares on the gaining side against 731 shares on the losing side while 52 shares remain unchanged.

The BSE Sensex opened at 20579.26; about 55 points lower compared to its previous closing of 20635.13, and has touched a high and a low of 20579.26 and 20369.07 respectively. The index is currently trading at 20376.75, down by 258.38 points or 1.25%. There were 6 stocks advancing against 24 declines on the index.

The overall market breadth has made a weak start with 35.61 % stocks advancing against 60.12 % declines. The broader indices were trading in red; the BSE Mid cap and Small cap indices were down by 0.63% and 0.39% respectively. 

The top losing sectoral indices on the BSE were, Bankex down by 2.13%, Realty down by 1.74%, FMCG down by 1.35%, Power down by 1.09% and Oil & Gas down by 1.05%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were Coal India up by 0.77%, Gail India up by 0.68%, Wipro up by 0.47%, Hindalco Industries up by 0.41% and Maruti Suzuki up by 0.34%. On the flip side, Sun Pharma was down by 2.04%, HDFC was down by 1.99%, ICICI Bank was down by 1.98%, ITC was down by 1.95% and HDFC Bank was down by 1.41% were the top losers on the Sensex.

Meanwhile, the Foreign Investment Promotion Board (FIPB) has approved 20 proposals worth Rs 916 crore including Singapore Airlines proposal of Rs 303.18 crore to form a partnership with Tata Sons to start a full service airline.

Among other major proposals, FIPB cleared Rs 179.43-crore proposal of Religare Enterprises to issue warrants to carry out the business of Investment Advisory Services and Financial Consultancy, JM Financial proposal of Rs 22.19 crore to issue warrants to set up a core investment company and Rs 130 crore Perrigo API India's proposal to increase the foreign equity participation from 85 percent to 100 percent by way of issue of fresh equity shares and transfer of equity shares in a pharma sector company. Meanwhile, FIPB has referred to the Cabinet Committee on Economic Affairs (CCEA) the Rs 1,400 crore proposal of Federal Bank to increase the foreign equity to 74 percent and for post facto approval for exceeding the foreign equity cap of 49 percent by 7.16 percent.

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. The government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas. Now, it has also started exercise in allowing FDI in railways sector besides liberalising FDI norms for construction and housing sector. Further, a rise in FDI will help support the rupee, which depreciated over 15 percent against US dollar in 2013. Despite the government's various efforts to increase foreign investment, FDI during the April-August period of 2013-14 has grown by a marginal 4 percent to $8.46 billion, from $8.16 billion in the first five months of 2012-13, reflecting the need to take more measures to improve the business environment in the country.

The CNX Nifty opened at 6,096.50; about 26 points lower as compared to its previous closing of 6,122.90, and has touched a high and a low of 6,097.35 and 6,038.30 respectively.

The index is currently trading at 6,047.35, down by 75.55 points or 1.23 %. There were 7 stocks advancing against 43 declines on the index.

The top gainers of the Nifty were Coal India up by 0.61%, Gail up by 0.55%, Hindalco up by 0.50%, Wipro up by 0.45% and Maruti Suzuki up by 0.33%. On the flip side, Axis Bank down by 3.47%, PNB down by 2.87%, Bank of Baroda down by 2.86%, IDFC down by 2.54% and Kotak Bank down by 2.48% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite lost 22.04 points or 1.00% to 2,184.58, Hang Seng declined by 166.44 points or 0.70% to 23,534.42, Jakarta Composite was down by 39.35 points or 0.90% to 4,311.43, KLSE Composite declined by 7.70 points or 0.43% to 1,790.99, Straits Times was down by 14.68 points or 0.46% to 3,169.55, Seoul Composite lost 23.27 points or 1.15% to 1,993.97 and Taiwan Weighted was lower by 87.45 points or 1.07% to 8,117.01.

On the other hand Nikkei 225 surged by 246.38 points or 1.63% to 15,322.46.