Feeble global cues drag benchmarks lower in early deals

Extending previous session’s bloodbath, key domestic markets have made a gap down start and are trading in the deep red with frontline gauges declining below their crucial 20,0000 (Sensex) 5,950 (Nifty). Sentiments remained down-beat after global markets witnessed a sell-off on lower-than-expected manufacturing data in the US. Asian markets too were witnessing massacre at this point of time. Japanese market was leading the losers' pack with cut of over three percent as yen strengthened and hit strongest level in more than two months.

Back home, investors remained concerned as the global credit rating agency and consulting firm Fitch on Monday called on the top brass of the Finance Ministry and raised concerns about country’s fiscal deficit. Select telecom stocks continue to feel pressure for second day in a row, as telecom firms have together put in bids of around Rs 42,000 crore on the first day of 2G spectrum auctions, giving respite to the government who had targeted Rs 40,874.50 crore from auctions and other charges.

Selling was both brutal and wide based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include software, technology, realty and metal. Broader markets too clobbered out of shape and were trading with cut of around a percentage point. The market breadth remained in favour of decliners, as there were 456 shares on the gaining side against 987 shares on the losing side, while 62 shares remained unchanged.

The BSE Sensex opened at 20050.99; about 158 points lower compared to its previous closing of 20209.26, and has touched a high and a low of 20051.88 and 19963.12 respectively. The index is currently trading at 19993.24, down by 216.02 points or 1.07%. There were 3 stocks advancing against 27 declines on the index.

The overall market breadth has made a weak start with 30.30% stocks advancing against 65.58% declines. The broader indices were trading in red; the BSE Mid cap and Small cap indices were down by 0.74% and 0.78% respectively. 

The top losing sectoral indices on the BSE were, IT down by 2.20%, TECk down by 1.95%, Realty down by 1.87%, Metal down by 1.47% and Auto down by 0.96%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were Hero MotoCorp up by 0.51%, Tata Power up by 0.28% and Hindustan Unilever up by 0.20%. On the flip side, Wipro was down by 3.38%, Mahindra & Mahindra was down by 2.94%, Hindalco was down by 2.85%, Gail India was down by 2.64% and TCS was down by 2.50% were the top losers on the Sensex.

Meanwhile, suggesting an economic recovery on its way, Indian manufacturing activity witnessed expansion in January with activity growing at its fastest pace in nearly a year on the back of increased domestic and overseas orders. The HSBC Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, rose to 51.4 in the month of January, highest since March, from 50.7 in the previous month.

The survey indicated that new businesses from abroad grew at a solid pace in January. Subsequently, Indian manufacturers raised their production levels for the third successive month with the rate of output growth was solid and the strongest since February 2013. Survey further highlighted that the growth in output and new orders for consumer goods continued to outperform the remaining two monitored categories including intermediate goods and consumer goods. Purchasing activity in the Indian manufacturing economy rose in the latest month, although the pace of expansion was slight and well below the series average. Further, employment level has also increased across all three monitored sub-sectors for the fourth consecutive month in January. The new orders sub-index, measuring overall new orders rose to 52.4 in the reported month from 51.3 in December.

The HSBC survey further asserted that deteriorated operating conditions in the Indian manufacturing sector signalled pressure on operating capacity in January, as backlogs of work increased solidly with the sharpest increase noted at consumer goods firms. Meanwhile, supplier performance improved in January for the first time since September’13 with shorter delivery times reflecting a greater availability of raw materials at vendors. Manufacturing firms further highlighted that input costs rose in January on account of higher prices for a range of raw materials, including metals, chemicals and energy. As a result, firms raised their output prices, however, the latest rise in output charges was moderate and much weaker than seen for input costs.

The CNX Nifty opened at 5,947.60; about 54 points lower as compared to its previous closing of 6,001.80, and has touched a high and a low of 5,953.75 and 5,933.30 respectively.

The index is currently trading at 5,941.75, down by 60.05 points or 1.00 %. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were UltraTech Cement up by 0.83%, Ambuja Cements up by 0.77%, Hero MotoCorp up by 0.71%, ACC up by 0.55% and Grasim up by 0.35%. On the flip side, Wipro down by 3.66%, HCL Tech down by 3.11%, Hindalco down by 2.95%, M&M down by 2.94% and Gail down by 2.75% were the top losers on the index.

The Asian equity indices were trading in red; Hang Seng dropped 524.36 points or 2.38% to 21,511.06, Jakarta Composite slipped 22.39 points or 0.51% to 4,363.87, KLSE Composite contracted 24.32 points or 1.35% to 1,779.71, Nikkei 225 tumbled 467.70 points or 3.20% to 14,151.43, Straits Times shed 19.66 points or 0.66% to 2,971.29 and Seoul Composite was down by 30.29 points or 1.58% to 1,889.67.

Markets in Shanghai and Taiwan remained closed for Lunar New Year holidays.