Markets nosedive to the day???s low; RIL plunges
Local equity markets dived to the day???s low on major slump in index heavyweights. Both the benchmark indices, Nifty and Sensex, are trading below their psychological levels of 5,400 and 18,000 respectively. Index heavyweights like RIL, ICICI Bank, HUL and L&T are trading at their day???s lowest level and clearly dragging the markets further southwards. Meanwhile, global equity markets are trading in the green with all other Asian markets ending the day in green and major European indices trading in the positive zone. Back home, Oil & Gas, Realty and Capital Goods segments were the major laggards while Auto and Healthcare counters were the main gainers in the BSE sectoral space. It will be a high trading volume day with total volumes already crossing the Rs 1.2 lakh crore. Key benchmark indices are likely to settle with hefty losses today. The market breadth on the BSE was in favour of declines in the ratio of 1662:1186 while 113 scrips remained unchanged.
The BSE Sensex declined 106.43 points or 0.59% to 17,971.18. The index touched a high and a low of 18,137.14 and 17,945.65, respectively.
The BSE Mid-cap and Small-cap indices shed 0.21% and 0.05%, respectively.
Auto up 0.67%, Healthcare (HC) up 0.40%, Metal up 0.19%, Consumer Durables (CD) up 0.05% and Power up 0.04% were the main gainers in the BSE sectoral space.
On the other hand, Oil & Gas down 1.52%, Realty down 0.98%, Capital Goods down 0.69%, Bankex down 0.04% and Public Sector Undertakings down 0.09% were the major losers in the BSE sectoral space.
Meanwhile, among the several risk factors enumerated by the RBI during its first quarter monetary policy review yesterday, it cautioned on the ramifications of any slowdown in capital flows. In the face of a global slowdown and an increasing risk aversion among global investors, there are fears that the flow of capital into emerging market economies, including India, may reduce. Any such slowdown would impact the current and trade deficit of the economy. The current account deficit has gone up on surging imports due to the faster-than-expected domestic economic recovery.
The current account deficit has already surged by 50% to $21.7 billion during the first two months of the current fiscal from around $14.4 billion a year ago. Increasing domestic industrial activity in the recent months has led to a sharp surge in the country???s total imports compared to the exports level. The increased current account deficit can be bridged by strong capital inflows.
Any potential slump in the foreign capital inflows would have also an adverse effect on the country???s investment scenario which is crucial to achieve a high and sustainable economic growth rate. ???Apart from narrowing the comfortable buffer between the current account deficit and net capital inflows, this may constrain domestic investment, which is critical to achieving and sustaining high growth rates,??? RBI said.
Cipla up 1.55%, SBI up 1.31%, M&M up 1.15%, Tata Power up 0.93% and HDFC Bank up 0.87% were the major gainers on the Sensex.
On the flip side, RIL down 2.64%, HUL down 2.40%, DLF down 2.11%, ICICI Bank down 1.80% and L&T down 1.79% were the major losers on the index.
According to the Petroleum and Natural Gas Minister, Murli Deora the recent hike in the prices of domestic liquefied petroleum gas (LPG) and kerosene is ???not that high??? and the repercussions of the increase is ???minimal??? on the consumers at large. He re-iterated the stance of government and attributed the increase in fuel price to fiscal consolidation of the country.
Talking about the impact of price hike on the household consumers he elucidated further that, the increase of Rs 35 on the cooking gas will increase the spending to Re 1 per day for the consumption of a LPG cylinder a month. Whereas the kerosene which got costlier by Rs 3, will increase the spending just by Rs 0.50 per day if a household uses 5 litre of kerosene a month. He also iterated that the rise in the kerosene price was the need of the hour because it had remained unchanged for more than half a decade and also to prevent its illegal usage as an adulterant in diesel.
The S&P CNX Nifty shed 29.60 points or 0.55% to 5,401.0. The index touched a high and a low of 5,447.85 and 5,390.80, respectively.
ABB up 4.49%, BPCL up 2.25%, Sun Pharma up 1.55%, Cipla up 1.49% and M&M up 1.48% were the top gainers on the Nifty. On the other hand, IDFC down 2.68%, RIL down 2.66%, HUL down 2.44%, DLF down 2.30% and Axis Bank down 1.91% were the top losers on the index.
Rest of the Asian markets settled in the positive terrain. Shanghai Composite surged 2.26%, Hang Seng increased 0.63%, Jakarta Composite advanced 0.69%, KLSE Composite gained 0.15%, Nikkei 225 jumped 2.70%, Straits Times advanced 0.20%, Seoul Composite added 0.29% and Taiwan Weighted rose 0.47%.
Major European indices were trading in the green; CAC-40 advanced 0.54%, DAX gained 0.11% and FTSE 100 increased 0.23%.
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