Markets slip into negative terrain after a gap up opening

Indian equity benchmarks have slipped into negative terrain after making a gap up opening tracking positive global cues. The US markets rose in last session even after the Federal Reserve announced plans to begin scaling back a monthly bond-buying program each month to $75 billion from $85 billion. Moreover, most of the Asian equity markets were trading in the green at this point of time with Japanese market continuing its surge for the second consecutive day as the yen touched a five year-low against the dollar.

Back home, bucking the positive trend seen in other Asian markets, the 50-share Nifty index which reclaimed its crucial level of 6,250 and Sensex which regained its 21,000 level in morning trade turned negative and slipped below its support level of 6200 levels and 20,700 mark, respectively. Depreciation in rupee too weighed-down sentiments. The partially convertible rupee was at 62.44 to the dollar versus its close of 62.09 on Wednesday after the Federal Reserve said it would scale down its monthly bond purchases, sending emerging market currencies lower.

On the sectoral front, software witnessed the maximum gain in trade followed by metal and technology, while banking, capital goods and oil and gas remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE was positive; there were 531 shares on the gaining side against 611 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 20959.80; about 99 point higher compared to its previous closing of 20859.86, and has touched a high and a low of 21017.45 and 20646.03 respectively. The index is currently trading at 20672.75, down by 187.11 points or 0.90%. There were 6 stocks advancing against 23 declines and one stock rains unchanged on the index.

The overall market breadth has made a strong start with 43.49% stocks advancing against 50.64% declines. The broader indices were trading mixed; the BSE Mid cap index down by 0.20% and Small cap index up 0.01%. 

The top gaining sectoral indices on the BSE were, IT up by 0.51%, Metal up by 0.37% and Teck up by 0.29%, while Bankex down by 1.81%, Capital Goods down by 1.78%, PSU down by 1.33%, Oil & Gas down by 1.23% and Realty down by 1.03% were the top losers on the sectoral index.

The top gainers on the Sensex were SSLT up by 1.74%, Hindalco Industries up by 1.53%, Jindal Steel up by 1.52%, TCS up by 0.87% and Infosys up by 0.29%. On the flip side, L&T was down by 2.51%, Hero MotoCorp was down by 2.17%, ICICI Bank was down by 2.13%, ONGC was down by 2.10% and HDFC was down by 1.98% were the top losers on the Sensex.

Meanwhile, In order to enhance competitiveness of the Micro, Small and Medium Enterprises (MSMEs), the National Board for MSMEs has discussed various aspects of MSME sector with special focus on the Public Procurement Policy. The board in its official statement appealed to all the members to mobilize MSME Associations and units to actively participate in the Procurement process at the government level to facilitate a demand pull growth in the segment.

The MSMEs board meeting chaired by Minister of State for MSME K H Muniyappa has also announced new developments in the MSME sector, which include creation of India Inclusive Innovation Fund, legal framework for factoring services and creation of 15 new technology centres.

Presently, every ministry except for defence is required to procure a minimum of 20% of annual value of goods and services from micro and small enterprises’. However many ministries are yet to come up with a procurement plan. The need to review Public Procurement Policy has emerged, as the share of MSMEs in the GDP, manufacturing output and exports has been slowly declining. Furthermore, owing to the nature of the structure of the MSMEs, they have far less ability to counter demands of time and resources as efficiently as their larger counterparts. The move is also aimed to counter the imports of electronic system and design management sector.

The CNX Nifty opened at 6,253.90; about 36 points higher as compared to its previous closing of 6,217.15, and has touched a high and a low of 6,263.75 and 6,150.70 respectively. The index is currently trading at 6,163.25, down by 53.90 points or 0.87%. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were SSLT up by 1.91%, Hindalco up by 1.49%, Jindal Steel up by 1.41%, HCL Tech up by 0.95% and TCS up by 0.81%. On the flip side, Kotak Bank down by 2.83%, PNB down by 2.32%, Hero MotoCorp down by 2.17%, L&T down by 2.16% and ONGC down by 1.99% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 9.45 points or 0.04% to 23,153.27, Jakarta Composite strengthened 43.71 points or 1.04% to 4,240.00, KLSE Composite increased 2.04 points or 0.11% to 1,849.54, Nikkei 225 surged 221.48 points or 1.42% to 15,809.28, Straits Times jumped 5.86 points or 0.19% to 3,067.64 and Taiwan Weighted was up by 37.08 points or 0.44% to 8,386.12.

On the flip side, Shanghai Composite slipped 1.90 points or 0.09% to 2,146.39 and Seoul Composite was down by 1.59 points or 0.08% to 1,973.04.