Benchmarks witness bloodbath in early trade; Nifty breaches 4,600 mark

Prolonging their three-session losing streak, the Indian equity markets have made a negative start and witnessing bloodbath in early trade on concerns over slowing industrial growth amid a weakening trend on other Asian bourses and persisting worries about the European debt crisis. However, the US markets managed a close in the green territory on Friday but only with moderate gains. Back home, continued offloading of stocks by funds and retail investors dampened the sentiments and BSE’s Sensex and NSE’s Nifty lost their crucial 15,300 and 4,600 mark respectively in the early trade. On the sectoral front, consumer durables remained the lone gainers while, banking, capital goods and realty remained the top losers on the BSE sectoral space. Meanwhile, the government has cleared the National Food Security Bill which will be tabled in Parliament for approval. The project aims to provide subsidized food grain to over 62% of the country's population and will cost Rs 1,50,000 crore to the tax payer. The broader indices too were struggling to get some traction and were trading in the red at this point of time while, the market breadth has made a negative start; there were 345 shares on the gaining side against 1,193 shares on the losing side while 54 shares remained unchanged.

The BSE Sensex opened at 15,440.10; about 51 points lower compared to its previous closing of 15,491.35, and has touched a low of 15,240.65 while high remain its opening.

The index is currently trading at 15,291.56, down by 199.79 points or 1.29%. There were just 4 stocks advancing against 26 declines on the index.

The overall market breadth has made a negative start with 21.67% stocks advancing against 74.94% declines. The broader indices too were bleeding badly; the BSE Mid cap and Small cap indices were down by 1.50% and 1.34% respectively.

Consumer Durables up by 0.05% remained the lone gainer in the sectoral indices on the BSE. While, Bankex down by 3.01%, CG down by 2.28%, Realty down by 1.98%, Power down by 1.59% and PSU down by 1.45% were the top losers on the index.

The only gainers on the Sensex were RIL up by 0.54%, TCS up by 0.40%, Coal India up by 0.20% and HUL was up by 0.11%.

On the flip side, ICICI Bank down by 4.00%, Bharti Airtel down by 3.21%, Sterlite Industries down by 3.08%, HDFC down by 3.03% and HDFC Bank down by 2.98% were the top losers on the index.

Meanwhile, the Cabinet is expected to reconsider the Food Security Bill on December 19, 2011. The proposed bill is likely to cost Rs 2 lakh crore annually for the government. Earlier the annual cost was estimated at Rs 1-1.5 lakh crore, but the latest calculation by the Commission for Agriculture Costs and Prices (CACP) could show a higher outgo. The government is aiming to introduce this bill in the ongoing winter session of Parliament.

For the current financial year, the finance ministry allocated Rs 60,572.98 crore in the Budget for food subsidy. The bill is expected to make a provision for providing not less than 7 kg of food grains per person per month for the priority household. Around 48% of all rural households and 28% of all the urban households shall be selected as priority households. Under which, the families will get rice at not less than Rs 3 per kg, wheat Rs 2 per kg and coarse grains not less than Rs 1 per kg.

Moreover, not less than 75% of rural households and at least 50% of urban households will be entitled to get food grains at subsidized prices, which will include priority and general households. It is also proposed to provide not less than 3 kg of food grains per person per month for the general household per person per month. Pricing under this category will not exceed 50% of the minimum support price for wheat, coarse grain and rice.

The proposed Bill will also have special provisions for pregnant women. Any unemployed pregnant woman will get maternity benefits of Rs 1,000 per month for a period of six months. Not only that, she will also get rations or nutritious and freshly cooked meals free of charge during pregnancy and six months thereafter. This food will be provided by local anganwadis.

The bill further talks about nutritious take home rations and/or freshly cooked meals throughout the year through the local anganwadi for all children in the age group of 0-3 years. All children in the age group of 3-6 years will get freshly cooked meals in the local anganwadi for at least 300 days in a year.

The centre is also likely to prescribe guidelines for the identification of priority and general households. This will include exclusion criteria also, on the basis of which, state governments will identify the households, and the list will be displayed in public domain.

The S&P CNX Nifty opened at 4,623.15; about 28 points lower compared to its previous closing of 4,651.60, and has touched a low of 4,570.60 while high remain its opening.

The index is currently trading at 4,583.75, down by 67.85 points or 1.46%. There were 7 stocks advancing against 43 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 1.24%, RIL up by 0.80%, Coal India up by 0.68%, ACC up by 0.57% and HCL Tech up by 0.21%.

Axis Bank down by 4.04%, Bharti Airtel down by 3.40%, ICICI Bank down by 3.39%, BHEL down by 3.31% and HDFC down by 3.13%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite was down 57.16 points or 2.57% to 2,167.68, Hang Seng was down 451.97 points or 2.47% to 17,833.42, Jakarta Composite was down 8.26 points or 0.22% to 3,760.10, Nikkei 225 was down 109.94 points or 1.31% to 8,291.78, Straits Times was down 43.49 points or 1.64% to 2,615.73, Seoul Composite was down 68.65 points or 3.73% to 1,771.31 and Taiwan Weighted was down by 152.35 points or 2.25% to 6,632.74.