Equity markets continue to gyrate near intra-day’s low level

Stock markets in India after faltering to intra-day’s low level, continue to gyrate in proximity to that level, as persistent profit-booking by nervy investor’s kept the trend bearish for Dalal Street. Relentless fall of Indian currency, which appears strikingly close to psychological ‘56/$’ mark combined with the global risk off sentiment could to be attributed to be the reason behind the nasty laceration of equity markets. 30 share index, Sensex, on BSE,  plummeting over a century of points, is trading sub 17400 mark, while the widely followed 50 share index, Nifty, on NSE, after tanking over a percentage points, is currently stagnating below the 5300 crucial mark. The broader indices too seem to have wilted under pressure.

On the global front, Asian pacific shares slumped after surprisingly weak U.S. jobs data exacerbated worries about flagging global economic growth. U.S. employers hired at a dismal pace in June, with non-farm payrolls growing by just 80,000 jobs, the third straight month below 100,000. Meanwhile, European futures showed downtick ahead of the outcome of a European Union finance ministers' meeting in Brussels today that would discuss the decisions taken in the euro area summit on June 29, 2012.

Closer home, some jitteriness could also be sensed ahead of the top banker meet with Reserve Bank of India officials on Monday,  before the first-quarter review of the monetary policy scheduled on July 31,2012. On the BSE sectoral front, stocks from Metal, Realty and Power counters underscored weakening trend of the bourses, while stocks from defensive Fast Moving Consumer Goods space, bucking the trend, showcased resilience. The overall market breadth on BSE was in the favour of declines which thrashed advances in the ratio of 1583:935, while 99 shares remained unchanged.

The BSE Sensex is currently trading at 17,381.56, down by 139.56 points or 0.80% after trading as high as 17,485.79 and as low as 17,372.58. There were 6 stocks advancing against 24 declines on the index.

The broader indices too wilted under pressure; the BSE Mid cap and Small cap indices were trading lower by 1.20% and 1.04% respectively.

On the BSE sectoral space, only defensive Fast Moving Consumer Goods up by 0.03% remained the lone gainer. On the flip side, Metal down by 1.97%, Realty down by 1.88%, Power down by 1.86%, Capital Goods down by 1.58% and Consumer Durable down by 1.12%.

TCS up by 1.08%, Tata Motors up by 0.29%, ITC up by 0.24%, Gail India up by 0.13% and ICICI Bank up by 0.09% were the major gainers on the Sensex, while Jindal Steel down by 3.17%, Bajaj Auto down by 2.41%, Maruti Suzuki down by 2.40%, Tata Steel down by 2.39% and HDFC Bank down by 2.25% were the prominent losers on the index.

Meanwhile, in a bid to achieve the disinvestment target of Rs 30,000 crore in FY13, the Finance Ministry is planning to set up exchange traded fund (ETF) for selling shares of public sectors undertakings (PSUs). The ETF will be launched in the format of Hong Kong Tracker Fund, in this regard, Disinvestment Department has floated a concept note for implementing it.

The government will make a bunch of shares of the state-owned companies in which it wants to divest stake and create a fund (ETF), which would be listed on stock exchanges. The ETF, which is an investment fund traded on stock exchanges much like stocks, would have an underlying benchmark which could be an index on the stock exchange. The government has already planned to divest stake in companies like Hindustan Copper, Oil India, SAIL, BHEL, HAL and RINL this fiscal.

Meanwhile, the government has started the process of divesting stake in PSUs in this fiscal and likely to come out with a public offer of RINL and Hindustan Copper by the end of this quarter. In last fiscal, the government had managed to mop-up only about Rs 14,000 crore through disinvestment as against a target of Rs 40,000 crore.

Earlier in January this year, the government had introduced offer for sale (OFS) and Institutional Placement Programme (IPP) model to attain Rs 30,000 crore target. IPP and OFS are two new share sale tools launched by the regulator Securities and Exchange Board of India (SEBI) to assist corporates in hiking their public shareholding. These two models will also help companies achieving the minimum 25 percent public holding guideline by June, 2013.

There are about 13 PSUs which have to meet the minimum public holding guidelines by August, 2013 while, all the listed companies are required to have at least 25 percent public holding by June, 2013.
The S&P CNX Nifty, after trading as high as 5,300.60 and as low as 5,260.65, was currently trading at 5,261.55, lower by 55.40 points or 1.04%. 4 stocks were advancing against 45 declining while one stock remained unchanged on the index.

The top gainers on the Nifty were TCS up by 0.94%, Tata Motors up by 0.31%, GAIL up by 0.15%, ITC up by 0.08%, while JP Associates down by 4.14%, Reliance Infra down by 3.77%, Jindal Steel down by 3.39%, Ranbaxy down by 3.14% and Bajaj Auto down by 3%were the major losers on the index.

The Asian equity indices were trading in the red; Shanghai Composite pummeled by 2.11%, Hang Seng index shrank 1.72%, KLSE Composite lost 0.11%, Strait Times plummeted by 1.21%, Kospi Composite Index plunged by 1.19%, and Taiwan Weighted declined by 0.80%.