It turned out to be an extremely volatile session of trade for the Indian frontline equity indices, oscillating in the range of around seven hundred points for the Sensex and over two hundred points for the Nifty as they failed to halt the six successive session downtrend. The BSE's Sensex has surfaced a gargantuan loss of close to one thousand five hundred points from last Tuesday while the losses for the NSE's nifty too are staggering about four hundred fifty points amid the ongoing pandemonium on both sides of the Atlantic which have shaken investor sentiment across the world. The global confidence seemed to have gone on holiday and the fresh S&P downgrades kept markets squarely focused on the FOMC rate decision scheduled later in the day. Meanwhile despite intervening in European debt markets the European Central Bank (ECB) has yet failed to convince the world's financial markets that it can contain the sovereign debt crisis to the euro zone. However, on the domestic front, sentiments showed some signs of improvement in the Tuesday's session as marketmen were seen accumulating badly beaten down but fundamentally strong stocks amid a series of assurances that came not only from the top Indian bureaucrats but also from the premier rating agency S&P which has been making a lot of noise of late. Sentiments in the local bourses improved after premier rating agency S&P's opined that there would be no immediate impact of US debt rating downgrade on India, providing the much-needed respite. The S&P's rating cut for the US may also prove as a blessing in disguise for the markets since it has brought about a broad based crash in international commodity prices, especially crude oil, helping the RBI in its battle against inflation. Also PMEAC Chairman C Rangarajan indicated that the recovery in markets is around the corner and is likely to commence in the next few days. He said that if the FIIs have sold now, they could come back after some time because India still remains one of those countries where growth remains high. Meanwhile the bourses which vivaciously rallied around six hundred points after hitting their lowest in more than 14 months, failed to hold on to the gains amid heightened volatility as the European markets tumbled on being rattled by the sharp jump in Chinese inflation, adding to fears of a global economic meltdown.
Earlier on Dalal Street, the benchmark plummeted nearly 300 points, or down 1.76% on the opening bell as frenzy sell-off continued amid volatile economic conditions in the US and Europe. Thereafter the key gauges slowly and steadily gathered steam and even went on to pare all the losses by the early noon trades. But the optimism proved short lived as profit booking at higher levels once again dragged the indices, leading them to extend the four session declining run to yet another session. Nevertheless the local bourse still managed to outperform all the European and most Asian peers. Eventually the NSE's 50-share broadly followed index Nifty, declined by around fifty points to settle above the crucial 5,050 support level while Bombay Stock Exchange's Sensitive Index, Sensex lost over a hundred points and ended above the psychological 16,850 mark. The broader markets too succumbed to the selling pressure by the end of trade and settled with large cuts, drifting deeper than their larger peers. On the sectoral front, it was the turn of Information technology counter to languish at the bottom of the BSE sectoral space on being slaughtered by about three and half a percent amid credit rating downgrade of the US, from where these companies earn around 60 per cent of their revenues. However, some short covering was seen in the IT heavyweight stocks after apex software industry body Nasscom stated that although the global economic environment is a cause for concern, it is not likely to adversely impact the Indian IT industry, in the near-term future. Reliance ADA Group shares too got badly butchered in the session with companies like R Com, R Capital, R Broadcast, R Power plummeting in the range of 2-5%. On the other hand there was some bottom fishing evident in some defensive FMCG majors which helped the index to snap the session with gains of the over a percent point while the rate sensitive Automobile counter remained the only other gainer with close to half a percent gains. The markets wilted on extremely large volumes of over Rs 2.16 lakh crore while the turnover for NSE F&O segment also remained on the higher side compared to Monday at over 1.97 lakh crore. The market breadth too remained very abysmal as there were only 829 shares on the gaining side against 2036 shares on the losing side while 104 shares remained unchanged.
Finally, the BSE Sensex lost 132.27 points or 0.78% to settle at 16,857.91, while the S&P CNX Nifty declined by 45.65 points or 0.89% to close at 5,072.85.
The BSE Sensex touched a high and a low of 17,135.04 and 16,432.00, respectively. The BSE Mid cap and Small cap indices were down by 1.27% and 2.05% respectively.
The top gainers on the Sensex were Mahindra & Mahindra up 4.29%, DLF up by 2.48%, ITC up by 2.44%, HDFC up by 2.02% and Jaiprakash Associate up 1.99%. On the flip side, Tata Steel down 4.87%, Tata Motors down 4.33%, TCS down 4.16%, Infosys down 3.68% and Cipla down 3.41% were the top losers on the index.
The major gainers on the BSE sectoral space were FMCG up by 1.36% and Auto up by 0.48%. While, IT down 3.47%, TECk down 2.74%, Metal down 2.73%, Health Care (HC) down 2.47% and Oil & Gas down 1.17% were the top losers on the BSE sectoral space.
Meanwhile, the Reserve Bank of India on Tuesday allowed foreign investors to buy the domestic Mutual Fund with the cumulative limit of $10 billion. This move of the central bank is expected to have positive impact on the capital inflow.
"A SEBI registered Foreign Institutional Investor (FII) and Non Resident Indian (NRI) may purchase, on repatriation basis, units of domestic Mutual Funds (MFs), subject to such terms and conditions mentioned therein and limits as prescribed for the same by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), from time to time," RBI said in the statement.
In consultation with the Government and the SEBI, the decision to allow non-resident investors (other than SEBI registered FIIs and SEBI registered FVCIs) who meet the KYC requirements of SEBI, hereinafter called 'Qualified Foreign Investors' (QFIs), to purchase on repatriation basis rupee denominated units of equity schemes of domestic MFs issued by SEBI registered domestic MFs in accordance with the terms and conditions as stipulated by the SEBI and the RBI from time to time in this regard, the statement added.
The QFIs can invest in rupee denominated units of equity of schemes of domestic Mutual Funds issued by the SEBI registered domestic Mutual Funds under the Direct Route i.e. SEBI registered Depository Participants (DP) route and Indirect Route, i.e. Unit Confirmation Receipt (UCR) route.
The QFIs also can buy additional $3 billion of debt funds that invest in minimum 5-year infrastructure related debt. However, it would be within the upper limit of $25 billion for FII investment in corporate bonds issued by the infrastructure firms.
This move of the RBI is expected to help in the growth of Indian Mutual Fund industry. According to data from the Association of Mutual Funds in India, currently the total asset under management of all Mutual Fund companies stood around Rs 7.28 trillion ($166 billion) till July 2011 with the equity funds accounting for 23%.
The S&P CNX Nifty touched high and low of 5,167.00 and 4,946.45, respectively.
The top gainers of the Nifty were Ambuja Cement up 3.28%, DLF up 3.27%, Grasim up 3.17%, Cairn up 2.44% and ACC up 1.74%.
On the flip side, Rpower down 6.84%, Dr Reddy down 4.35%, GAIL down 2.92%, Cipla down 2.76% and BPCL down by 2.23% were the top losers on the index.
Earlier on Dalal Street, the benchmark plummeted nearly 300 points, or down 1.76% on the opening bell as frenzy sell-off continued amid volatile economic conditions in the US and Europe. Thereafter the key gauges slowly and steadily gathered steam and even went on to pare all the losses by the early noon trades. But the optimism proved short lived as profit booking at higher levels once again dragged the indices, leading them to extend the four session declining run to yet another session. Nevertheless the local bourse still managed to outperform all the European and most Asian peers. Eventually the NSE's 50-share broadly followed index Nifty, declined by around fifty points to settle above the crucial 5,050 support level while Bombay Stock Exchange's Sensitive Index, Sensex lost over a hundred points and ended above the psychological 16,850 mark. The broader markets too succumbed to the selling pressure by the end of trade and settled with large cuts, drifting deeper than their larger peers. On the sectoral front, it was the turn of Information technology counter to languish at the bottom of the BSE sectoral space on being slaughtered by about three and half a percent amid credit rating downgrade of the US, from where these companies earn around 60 per cent of their revenues. However, some short covering was seen in the IT heavyweight stocks after apex software industry body Nasscom stated that although the global economic environment is a cause for concern, it is not likely to adversely impact the Indian IT industry, in the near-term future. Reliance ADA Group shares too got badly butchered in the session with companies like R Com, R Capital, R Broadcast, R Power plummeting in the range of 2-5%. On the other hand there was some bottom fishing evident in some defensive FMCG majors which helped the index to snap the session with gains of the over a percent point while the rate sensitive Automobile counter remained the only other gainer with close to half a percent gains. The markets wilted on extremely large volumes of over Rs 2.16 lakh crore while the turnover for NSE F&O segment also remained on the higher side compared to Monday at over 1.97 lakh crore. The market breadth too remained very abysmal as there were only 829 shares on the gaining side against 2036 shares on the losing side while 104 shares remained unchanged.
Finally, the BSE Sensex lost 132.27 points or 0.78% to settle at 16,857.91, while the S&P CNX Nifty declined by 45.65 points or 0.89% to close at 5,072.85.
The BSE Sensex touched a high and a low of 17,135.04 and 16,432.00, respectively. The BSE Mid cap and Small cap indices were down by 1.27% and 2.05% respectively.
The top gainers on the Sensex were Mahindra & Mahindra up 4.29%, DLF up by 2.48%, ITC up by 2.44%, HDFC up by 2.02% and Jaiprakash Associate up 1.99%. On the flip side, Tata Steel down 4.87%, Tata Motors down 4.33%, TCS down 4.16%, Infosys down 3.68% and Cipla down 3.41% were the top losers on the index.
The major gainers on the BSE sectoral space were FMCG up by 1.36% and Auto up by 0.48%. While, IT down 3.47%, TECk down 2.74%, Metal down 2.73%, Health Care (HC) down 2.47% and Oil & Gas down 1.17% were the top losers on the BSE sectoral space.
Meanwhile, the Reserve Bank of India on Tuesday allowed foreign investors to buy the domestic Mutual Fund with the cumulative limit of $10 billion. This move of the central bank is expected to have positive impact on the capital inflow.
"A SEBI registered Foreign Institutional Investor (FII) and Non Resident Indian (NRI) may purchase, on repatriation basis, units of domestic Mutual Funds (MFs), subject to such terms and conditions mentioned therein and limits as prescribed for the same by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), from time to time," RBI said in the statement.
In consultation with the Government and the SEBI, the decision to allow non-resident investors (other than SEBI registered FIIs and SEBI registered FVCIs) who meet the KYC requirements of SEBI, hereinafter called 'Qualified Foreign Investors' (QFIs), to purchase on repatriation basis rupee denominated units of equity schemes of domestic MFs issued by SEBI registered domestic MFs in accordance with the terms and conditions as stipulated by the SEBI and the RBI from time to time in this regard, the statement added.
The QFIs can invest in rupee denominated units of equity of schemes of domestic Mutual Funds issued by the SEBI registered domestic Mutual Funds under the Direct Route i.e. SEBI registered Depository Participants (DP) route and Indirect Route, i.e. Unit Confirmation Receipt (UCR) route.
The QFIs also can buy additional $3 billion of debt funds that invest in minimum 5-year infrastructure related debt. However, it would be within the upper limit of $25 billion for FII investment in corporate bonds issued by the infrastructure firms.
This move of the RBI is expected to help in the growth of Indian Mutual Fund industry. According to data from the Association of Mutual Funds in India, currently the total asset under management of all Mutual Fund companies stood around Rs 7.28 trillion ($166 billion) till July 2011 with the equity funds accounting for 23%.
The S&P CNX Nifty touched high and low of 5,167.00 and 4,946.45, respectively.
The top gainers of the Nifty were Ambuja Cement up 3.28%, DLF up 3.27%, Grasim up 3.17%, Cairn up 2.44% and ACC up 1.74%.
On the flip side, Rpower down 6.84%, Dr Reddy down 4.35%, GAIL down 2.92%, Cipla down 2.76% and BPCL down by 2.23% were the top losers on the index.
The European markets were trading in red. France's CAC 40 lost 0.45%, Britain's FTSE 100 lower by 1.70% and Germany's DAX declined by 3.13%.
All the Asian equity indices continued to wilt and snapped the day's trade in the red as investors reacts to an unprecedented downgrade of the US government's credit rating and lingering concerns over European debt problems and global economic growth. Japanese Nikkei index closed 1.68 percent lower at 8,944.48 on Tuesday, its first finish below the 9,000 mark since mid-March, recovering from a more than 4 percent drop earlier in the session. South Korea's Kospi index sustained massive losses in the opening hours, at one point plunging more than 9 percent and bringing a brief halt to trading but, the index clawed back and finished with losses of 3.64 percent for the day. However, Singapore's Straits Times Index remained closed on the back of 46th National Day holiday. 
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