NIFTY LOOSES 5000 LEVEL

Cuts at the bourses have grown deeper as risk-loath investors flee with greater speed off Dalal Street owing to the lingering worries over the worsening external environment, particularly in the U.S. and the euro-zone that continued to haunt global investors, thereby encouraging them to resort safety of safe heaven securities such as that of gold and bonds. Japan's exports which fell for a fifth straight month in July which mainly weighed on the Asian markets also cracked the sentiment at Dalal Street in early deals. Exports fell 3.3 percent from a year ago to 5.78 trillion yen ($75.4 billion). Overnight, in the US markets, the Dow and S&P closed near the flat line after toggling between small gains and losses for most of the afternoon in light volume trading. However, the Nasdaq fell half a percent, as tech stocks dragged on the market. Tech shares fell on Wednesday after Dell's disappointing sales outlook fanned worries weak economic growth will hurt earnings in the third quarter. The US future indices too were showing a downtick in the screen trade. Back home, reports from the Brokerage firm - Morgan Stanley also dented the already fragile sentiment. Morgan Stanley slashed global growth and India GDP forecast from 7.4% to 7.2% for FY12. Morgan Stanley said, 'India may not be able to respond, given the starting point of a high fiscal deficit. The government may focus more on boosting private sector confidence through policy reform.  Selling pressure which intensified sent stocks of banking, Information Technology and TECk counters drastically lower, while stocks from Realty, Fast Moving Consumer Goods and Consumer Durables got in some respite. Banking shares were squashed in red on speculation that India's central bank will continue boosting rates to cool inflation. The 50 share index- Nifty- threw a shocker by dipping below 5000 mark, while the 30 scrip sensitive index-Sensex- tanking over 150 points was trading closer to 16500 mark. The broader indices too were down and out with loss of over 0.50% each. The overall market breadth on BSE was dominantly in the favour of declines which thrashed advances in the ratio of 1430:630, while 97 shares remained unchanged.
 The BSE Sensex is currently trading at 16,651.61, down by 189.19 points or 1.12%. The index has touched a high and low of 16,916.81 and 16,583.51 respectively. There were 6 stocks advancing against 24 declines on the index.
The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.80% and 0.91% respectively.
The top gaining sectoral indices on the BSE were, Realty up by 0.64%, FMCG up by 0.48%, CD up by 0.30%. While, Bankex down by 2.47%, IT down by 2.14%, TECk down by 1.53%, Auto down by 1.14% and Metal down by 1.09% were the top losers on the index.
The top gainers on Sensex were DLF up by 2.70%, HUL up by 0.47%, Hero Motor Company up by 0.43%, ONGC up by 0.29% and ITC up by 0.24%.
On the flip side, ICICI Bank was down by 4.45%, TCS was down by 2.96%, Tata Motors was down by 2.42%, Wipro down by 2.40% and Infosys was down by 1.88% were the top losers on the Sensex.
Meanwhile, the Reserve Bank of India (RBI) will maintain its anti inflationary stance and expects inflation to be around 7% by March 2012. The RBI Deputy Governor K C Chakrabarty on August 17 said, 'whatever the inflation guidance is given in the quarterly statement (July) that stands as of today.' The RBI in its quarterly monetary policy statement, had revised upward its inflation projection for the March 2012, it has increased its forecast from 6% to 7%.  
Headline inflation measured by the wholesale price index (WPI) for the month of July stood at 9.22% down from 9.44% in the last month. The government has also revised inflation numbers for the month of May from 9.06% to 9.56%. Earlier, the government revised inflation numbers for April to 9.74%. The non-food inflation or core inflation also increased for July, it stood at 7.5% from 7.3% in June. Looking at the trend of inflation data revision, if government revised inflation data for the month of July then it may touch the two digit mark.

From the monetary policy perspective, central bank has maintained its anti-inflationary stance by ignoring the slowdown in growth. Since March 2010, RBI has increased its key policy rates by 11 times, with headline inflation and core inflation expected to be at elevated level for coming few months. RBI is expected to continue its anti-inflationary stance. On September 16, it may increase its policy rates by 25 basis points.

On the New Banking license, the RBI Deputy Governor said the draft guidelines could be expected any time soon. RBI had submitted the draft guidelines on new banking licenses to the finance ministry for approval, which is believed to have been cleared by the ministry.
The S&P CNX Nifty is currently trading at 4,993.05, lower by 63.55 points or 1.26%. The index has touched a high and low of 5,078.60 and 4,977.20 respectively.  There were 9 stocks advancing against 41 declines on the index.
The top gainers of the Nifty were DLF up by 2.88%, RCom up by 1.86%, Hero Motors Company up by 0.49%, HUL up by 0.41% and Ranbaxy up by 0.35%.
On the flip side, ICICI Bank down by 4.48%, Axis Bank down by 3.84%, PNB down by 3.79%, IDFC down by 3.25% and Wipro down by 2.58% were the major losers on the index.
Most of the Asian equity indices were trading in the red; Shanghai Composite was down by 0.34%, Hang Seng was down 0.21 points, KLSE Composite was down by 0.19%, Nikkei 225 was down by 1.26%, Seoul Composite was down by 2.87% and Taiwan Weighted was down by 2.32%.
On the flip side, Jakarta Composite gained 1.41% and Straits Times was up by 0.24%