Bourses magnify losses; Sensex slips below 21,150 level

Dragged by concerns over earnings of two blue chip stocks, TCS and ITC,  local bourses have magnified losses and are sulking with losses of over half a percent, below the crucial 21,150 (Sensex) and 6,300 (Nifty) levels respectively. TCS’ shares, which plunged as much as 4.5 per cent in morning trade on Friday to record its worst percentage loss since October 17, dragged the entire pivotal lower after IT major’s december quarter profit when adjusted for other income, as well as operating margin, were seen lagging expectations. Additionally, ITC shares slipped after operational performance fell short of expectation. Meanwhile, Broader indices too reeling under pressure are trading with cut of over half a percent.

Nevertheless, mood at Dalal Street remained downbeat right from the start of the trade after global rating agency, Moody's underscored that India's economic recovery is likely to be slow in the second half of 2014. Further, weak global cues also added to the pessimistic sentiments. In the global markets, Asian pacific shares were lost in the sea of red after underwhelming U.S. earnings results pulled the plug on Wall Street's two-day rally. shares slipped as Investors digested comments from Federal Reserve Chairman Ben Bernanke, who said the central bank should be giving the U.S. economy the stimulus it needs despite worries that quantitative easing may destabilize the financial system.

Closer home, with the selling now turning to be broad-based, stocks from Oil and Gas , Auto, FMCG and PSU counters managed to showcase some resilience. On the flip side, Information Technology, Banking and Capital Goods counters were the top laggards of the session. Selling was witnessed in banking stocks after the industry body Assocham underscored that the growth of Indian banking industry is likely to remain under pressure with gross non-performing assets (NPAs) expected to touch 5 percent of total loans by March this year.  The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1445:814; while 141 shares remained unchanged.

The BSE Sensex is currently trading at 21138.78, down by 126.40 points or 0.59% after trading in a range of 21,270.11 and 21131.66. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices too were down and out in red; the BSE Mid cap and Smallcap indices were trading lower by 0.66% and 0.71% respectively.

The gaining sectoral indices on the BSE were Oil and Gas up by 0.74%, Auto up by 0.38%, FMCG up by 0.12%, and PSU up by 0.05%. While, IT down by 1.88%, Teck down by 1.62%, Bankex down by 0.91%, Capital Goods down by 0.52% and Realty down by 0.50% were the top losing indices on BSE.  

The top gainers on the Sensex were Hindustan Unilever up by 1.30%, Tata Power up by 1.28%, Bajaj Auto up by 1.26%, M&M up by 0.91% and Cipla up by 0.85%. On the flip side, TCS down by 5.07%, Wipro down by 3.33%, HDFC down by 2.34%, Axis Bank down by 1.95% and ICICI Bank down by 1.20%.

Meanwhile, concerned over acute liquidity crunch faced by the Indian fertiliser sector, The Fertiliser Ministry has sought an additional subsidy of Rs 20,000 crore. Non-allocation of subsidy fund to fertilizer industry on time has left it with no money to pay subsidy bills for the third and fourth quarters in the current financial year.

So far this fiscal, the government has allocated Rs 70,586 crore funds to Department of Fertiliser (DoF) as against the total demand of Rs 1,05,497 crore for the 2013-14 fiscal. Commodity wise, a subsidy of Rs 41,158.85 crore was allocated for urea and Rs 29,426.88 crore for P&K fertilisers. The DoF has been able to pay subsidy dues till May to fertiliser firms manufacturing urea locally, while for non-urea fertilizers, it can pay subsidy only till this month.

Meanwhile, in order to help fertiliser companies tide over the cash crunch, The Finance Ministry has approved a special banking arrangement of Rs 9,000 crore. Earlier in September, the Finance ministry had agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF).

Backlog of Rs 32,000 crore for the year 2012-13 has to be paid from this year's allocations. The government has agreed to bear interest of 8 per cent per annum with 2.7 per cent interest to be borne by the industry. For this repayment, Finance Ministry provided a cash outgo of Rs 2,000 crore as additional subsidy in the second supplementary demand for grants approved in December.

The CNX Nifty is currently trading at 6,287.65 down by 31.25 points or 0.49% after trading in a range of 6,327.10 and 6,286.90. There were 21 stocks advancing against 29 declining on the index.

The top gainers of the Nifty were BPCL up by 2.59%, Ambuja Cement up by 1.51%, Hindustan Unilever up by 1.29% Tata Power and Bajaj Auto were up by 1.28%. On the flip side, TCS down by 4.99%, Wipro down by 3.70%, Ranbaxy down by 3.52%, HDFC down by 2.23%,and PNB down by 1.86% were the top losers.

The Asian equity indices were trading in red; Seoul Composite down by 0.66%, Taiwan Weighted down by 0.19%, Shanghai Composite down by 0.99%, KLSE Composite down by 0.60%, Jakarta Composite down by 0.02%, Nikkei 225 down by 0.08% and Straits Times down by 0.04%. While, Hang Seng up by 0.77% was the only gainer among Asian pack.