Sensex, Nifty slips deeper into red as selling gains momentum

After opening lower due to weak global cues, Indian equity markets slipped deeper into the red amid constant selling across the counters. The Sensex extended losses and currently down by 116 points, while NSE Nifty continued to trade below the 5,700 level as future and options expiry day on Thursday witnessed range bound movement and mixed activity across stocks. Investors were trading cautiously ahead of important result announcements. On sectoral front, all were trading in red barring auto sector, which held gains as utility vehicle maker Mahindra & Mahindra rallied on reporting a better-than-expected 22% year-on-year rise in second quarter net profit at Rs 902 crore, helped by strong automotive sales growth and higher other income. In global markets, Asian shares were trading in red, as earnings of companies like Yamaha disappointed the street. Back home, the market breadth favoring negative trend; there were 912 shares on the gaining side against 1,422 shares on the losing side while 115 shares remain unchanged.

The BSE Sensex is currently trading at 18,642.21, down by 116.42 points or 0.62%. There were only 7 stocks advancing against 23 declines on the index.

The broader indices have slipped into red, though performing better than benchmarks; the BSE Mid cap index was down by 0.18% while Small cap index lost 0.38%.

Consumer Durables (CD) down by 1.32%, FMCG down by 1.06%, Oil and Gas down by 1.04%, Health Care (HC) down by 0.91% and PSU down by 0.60% were the top losing sectors on the BSE. While, Auto up by 0.66% was the lone gainer.

The gainers on the Sensex were M&M up by 1.90%, Tata Motors up by 1.05%, Sterlite Industries up by 0.40%, Hero MotoCorp up 0.38% and ICICI Bank up by 0.35%.

On the other hand, top laggards included, ITC down by 1.87%, Dr Reddy’s down by 1.70%, RIL down by 1.56%, HDFC down by 1.54%, and Sun Pharma down by 1.20%.

Meanwhile, in light of subdued manufacturing sector performance, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan lowered the growth projection for the current fiscal to 6 per cent from 6.7 per cent estimated earlier. The PMEAC, in its 'Economic Outlook for 2012-13' report released in August pegged Indian economy’s growth rate at 6.7 per cent.

However with the hope that economy would pick-up in second half, the Prime Minister's key advisor, estimated the growth rate of 6%. Rangarajan said the economic growth in July-September quarter would be around 5.5 per cent, ditto to first quarter, as the recent set of factory output data failed to show any improvement. Industrial output in the April-August period this fiscal was at 0.4 per cent, way lower from 5.6 per cent in the same period in 2011-12.

Further, reasoning good agriculture produce and some pick-up in industrial activities in the key infrastructure areas, PMEAC’s chairman, is expecting some recovery in economy’s growth rate in the second of the current fiscal. Rangarajan said, “I see a strong pick up in the growth of key manufacturing sectors like coal, power, road and railways. The monsoon has turned out to be little better than what was expected, therefore agriculture production may do better than what was originally expected.”

He further underscored that since the growth in manufacturing production was lower in the second half of 2011-12 fiscal, the benefit of lower base which would be accrued in the current fiscal, could push up the growth. Furthermore, the chairman emphasized the need of strong action at the ground level to achieve production and capacity creation targets, as a catalyst to higher growth.

The S&P CNX Nifty is currently trading at 5,669.30, down by 36.00 points or 0.63%. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were M&M up by 1.84%, IDFC up by 1.56%, Ambuja Cement up by 0.90%, Tata Motors up by 0.88% and Hero MotoCorp up by 0.70%.

On the flip side, JP Associates down by 3.41%, Kotak Bank down by 2.66%, ITC down by 2.05%, Dr Reddy down by 1.89% and RIL down by 1.72% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite plunged by 1.85%, Hang Seng declined by 1.16%, Nikkei 225 slumped by 1.35%, Kospi Composite fell by 1.72% and Taiwan Weighted was down by 1.76%.

Indonesian Jakarta Composite, Malaysia’s KLSE Composite and Singapore’s Straits Times remain closed on account of public holiday.