Benchmarks continue to trade weak in late morning

Benchmarks were reeling under selling pressure weighed down by rate sensitive sectors after Reserve Bank of India Governor Raghuram Rajan commented that inflation is a destructive disease which is forcing the central bank to keep interest rates high. Sentiments remained down beat as the rupee hit 62.90 in early trade, its lowest level since November 22, as Asian stocks were trading with heavy losses. Some pessimism also came on report that foreign institutional investors (FIIs) sold shares worth a net Rs 230.96 crore on January 24, 2014.  Meanwhile, Investors remained cautious ahead of outcome of the Reserve Bank of India (RBI) and the US Federal Reserve’s policy review meetings scheduled later in the week.

On the global front, Asian markets too were trading lower at this point of time with deep cut amid renewed concerns about the outlook for the global economy on account of recent weak data from China. Fears of more stimulus tapering from the US Federal Reserve too was dampening the sentiments. Japanese markets declined by over two percent as the yen surged to a seven-week high against the dollar.

Back home, traders were selling in Metal, Auto and Bankex on the BSE. The market breadth on BSE remains negative with advances to declines in the ratio of 364: 1385. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,800 and 6,150 levels respectively. The BSE Sensex is currently trading at 20813.77 down by 319.79 points or 1.51% after trading in a range of 20899.03 and 20787.25. There were 1 stocks advancing against 29 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 1.82% and Small cap index lost 1.84%.

The top losing sectoral indices on the BSE were, Metal down by 3.07%, Auto down by 3.00%, Bankex down by 2.88%, Realty down by 2.24% and Capital Goods down by 2.10%, while there were no gainers on the sectoral front.

The top losers on the Sensex were Tata Motors was down by 5.24%, Maruti Suzuki was down by 3.84%,  SSLT was down by 3.67%, Hindalco Industries was down by 3.60% and ICICI Bank was down by 3.54%, while TCS was up 0.26% was  only gainer on the Sensex.

Meanwhile, amid rising concerns over the prevailing economic slowdown, Planning Commission Deputy Chairman Montek Singh Ahluwalia has attributed the decline in India's growth rate mainly to domestic factors and expressed the need for the government to take quick decisions to boost the economic growth.

Highlighting that the government cannot blame the global factors entirely for the country's flat growth, Ahluwalia asserted that the one third of prevailing economic downturn could be attributed to global factors and two-thirds to domestic factors. In the previous fiscal, India's economy’s growth slowed down to a decade low of 5 percent owing to the global slowdown as well as domestic factors such as high inflation and interest rates. The growth is estimated to remain around the same level in current fiscal.

By adding further, Ahluwalia said that India could potentially sustain a growth rate of 7 percent in future. Referring to growth in infrastructure sector, he asserted that major development in country’s infrastructure would be taken place after India's general elections in May.

The CNX Nifty is currently trading at 6,166.65 down by 100.10 points or 1.60% after trading in a range of 6,188.55 and 6,162.90. There were 1 stocks advancing against 49 stock declines on the index.

The only gainer of the Nifty was TCS up by 0.24%, On the flip side, Ranbaxy down by 5.93%, Tata Motors down by 5.21%, JP Associat down by 4.50%, IndusInd Bank down by 4.45%, and SSLT down by 4.02% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite dipped 14.10 points or 0.69% to 2,040.29, Hang Seng tumbled 462.41 points or 2.06% to 21,987.65, Jakarta Composite tanked 135.23 points or 3.05% to 4,302.12, KLSE Composite decreased 15.40 points or 0.85% to 1,787.17, Nikkei 225 declined 333.14 points or 2.16% to 15,058.42, Straits Times shed 40.83 points or 1.33% to 3,035.16, Seoul Composite contracted 27.46 points or 1.42% to 1,913.10 and Taiwan Weighted was down by 121.37 points or 1.41% to 8,476.94.