Sensex plunges to day’s lows as IT, rate sensitives get severely thrashed

Friday’s brutal rout in Indian equity markets got extended in Monday’s session as the benchmark gauges got dragged to session’s lows in early afternoon session after investors continued to book profits from blue-chip stocks. Market participants squared off hefty positions from the Information Technology and rate sensitive Banking and Realty and dragged the frontline indices closer to the psychological 17,300 (Sensex) and 5,250 (Nifty) levels. The markets kept drifting lower at a time when PM Manmohan Singh addressed the parliament on a range of issues including the resignation of Rail Minister, Budget etc. Sentiments also remained somber in the session since investors squared off positions from most counters after global rating agency S&P cautioned that India’s budget for the fiscal year ending March 31, 2013, would be mildly negative for the unsolicited sovereign credit rating on India (BBB-/Stable/A-3). Moreover, index heavyweight Reliance Industries too exerted pressure on the frontline indices as it plummeted close to two percent after reports showed the largest gas fields in its KG-D6 block have hit an all-time low production of about 28 million standard cubic meters per day as the firm shut six wells due to water and sand ingress. Meanwhile, India’s Consumer price inflation, similar to the WPI quickened in February to 8.83% on account of higher prices of protein based items and edible oil products, dampened investors’ morale. Also the sovereign bond yields have spiked up post rise in inflation numbers and stoked up worries among investors. Besides, Indian bourses were outperformed by the global peers as most Asian equity indices traded on a positive note as improving US economic growth prospects helped maintain enthusiasm for riskier assets. While, the European futures too indicated that the markets there would open on a positive note amid signs of a pickup in merger and acquisition activity.

Moreover, the broader markets after showing resilience in early hours slipped into the negative terrain but traded with only moderate cuts, performing better than their larger peers. The bourses dived on large volumes of over Rs 0.90 lakh crore while market breadth on BSE was in favor of declines in the ratio of 1525:1035 while 113 scrips remained unchanged.

The BSE Sensex is currently trading at 17,323.91 down by 142.29 points or 0.81% after trading as high as 17,561.46 and as low as 17,319.77. There were 9 stocks advancing against 21 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index was slipped 0.33% and Small cap shed 0.42%.

On the BSE sectoral space FMCG was up by 1.25%, Consumer Durables up 0.52%, Healthcare up by 0.11%, Metal up 0.11% and Auto up 0.6% were the only gainers, while IT down by 1.96%, TECk down by 1.63%, Realty down by 1.53%, Bankex down by 1.52%, Capital Goods down by 1.25% were the major losers in the space.

M&M up by 2.34%, ITC up by 2.13%, Sun Pharma up by 1.16%, Sterlite up by 1.14% and Hindalco up by 1%, were the major gainers on the Sensex, while TCS down by 4.01%, BHEL down by 2.87%, SBI down by 1.98%, RIL down by 1.94% and Tata Power down by 1.80% were the major losers in the index.

Meanwhile, after showing signs of moderation in recent times, India’s consumer price inflation quickened in the month of February as compared to that in January, in line with the trend also shown by wholesale price inflation.  According to the data released by Central Statistics Office, provisional annual inflation rate based on all India general CPI (Combined) for February 2012 on point to point basis (February 2012 over February 2011) came in at 8.83% as compared to  7.65% (final) for the previous month of January 2012.

All India provisional General (all groups) Consumer Price Index (CPI) numbers of February 2012 for rural and urban combined was 114.6 against 114 in January 2012, according to the Ministry of Statistics and Programme Implementation which released the monthly provisional CPI on Base 2010=100 along with annual inflation rates for February 2012.

The corresponding inflation rates for rural and urban areas came in at 8.36% and 9.45% as against January’s 7.38% and 8.25% which indicated that the growth in rate of price rise in urban areas was at a faster clip than that in the rural areas. Provisional annual inflation rates of February 2012 for rural, urban and combined in respect of ‘food and beverages’ were 6.33%, 7.17% and 6.62% respectively.

The S&P CNX Nifty is currently trading at 5,274.80, lower by 43.10 points or 0.81% after trading as high as 5,340.70 and as low as 5,273.75. There were 15 stocks advancing against 35 declines on the index.

The top gainers on the Nifty were ACC up by 2.25%, M&M up by 2.24%, ITC up by 2.06%, Sterlite up by 1.27%, ONGC up by 1.20%.

TCS down by 4.19%, IDFC down by 4.07%, R Infra down by 3.05%, BHEL down by 2.89%, Kotak Bank down by 2.14% were the major losers on the index.

In the Asian space, Shanghai Composite advanced 0.26%, Hang Seng gained 0.24%, KLSE Composite added 0.08%, Nikkei 225 rose 0.12%, Straits Times moved up 0.18% and Seoul Composite climbed 0.62%.

On the other hand Jakarta Composite fell 0.09% and Taiwan Weighted shed 0.14%.