WEAKNESS CONTINUES

The Indian equity markets continued with the negative rally and extended losses led by constant selling across index heavyweights on the backdrop of downgrading global growth during the late morning session. Sensex was unable to move further while Nifty still below the 5,000 mark. NSE benchmark Nifty's shivering hampered investor's sentiments to a large extent. Meanwhile primary articles inflation for week ended August 6 has come in at 11.64% versus 12.22% (WoW), food articles inflation at 9.03% versus 9.90% (WoW) while fuel group inflation is at 13.13% versus 12.19% (WoW). On sectoral front Information technology stocks, which ended on a tough note on Wednesday, have floated lower this morning. Bank stocks too are mostly down in negative territory on Reserve Bank of India's (RBI) move to focus on controlling inflation even as inflation has shown some signs of easing. Automobile, PSU, Metal, capital goods and power stocks are trading weak. Realty stocks are finding some support after recent heavy losses. Consumer durables and FMCG stocks too are edging higher. Major private banks like ICICI Bank and Axis Bank fell 3.6% each on rate hike fears. On global front Asian stock markets were trading the day on a red note amid growing worries about the state of the global economy. Back home, the market breadth favoring negative trend; there were 706 shares on the gaining side against 1,690 shares on the losing side while 107 shares remained unchanged. 
The BSE Sensex is currently trading at 16,653.95, down by 186.85 points or 1.11%. The index has touched a high and low of 16,916.81 and 16,583.51 respectively. There were 11 stocks advancing against 17 declines on the index and 3 remained unchanged.
The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.94% and 1.09% respectively.
The top gaining sectoral indices on the BSE were, Realty up by 0.72%, FMCG up by 0.51%, CD up by 0.04%. While, IT down by 3.27%, TECk down by 2.20%, Bankex down by 2.17%, Metal down by 1.25% and PSU down by 0.85% were the top losers on the index.
The top gainers on Sensex were DLF up by 2.84%, Hero Motors up by 0.89%, HUL up by 0.78%, Bharti Airtel up by 0.73% and ONGC up by 0.52%.
On the flip side, Wipro down by 4.24%, TCS down by 3.64%, ICICI Bank down by 3.59%, Jindal Steel down by 3.49% and Infosys down by 3.12% were the top losers on the Sensex.
Meanwhile, in the middle of the debate over whether to allow or not corporate houses to enter into the banking sector, the finance ministry is planning to bar industrial houses conducting business in four sectors, including real estate, from seeking banking licenses.
The ministry of finance is seeking to prepare a negative list of four sectors, including real estate, which will be barred from the banking space. These restrictions on the new players are with the view that these sectors can manipulate the banking system. However, with strict restrictions, the industrial houses may be allowed to apply for new licenses. The draft guidelines on the New Banking Policy are expected to be released by the end of the week. The draft policy will be released for discussions, after that it will be finalized.
Earlier, Finance Minister Pranab Mukherjee said that he will comment on the issue once the RBI issue the guidelines. "Let's see how it (RBI draft guidelines) comes... and thereafter we will make comment," the finance minister said.
On the issue of foreign direct investment (FDI), the ministry of finance seems to be in agreement with the Reserve Bank of India (RBI). On the foreign investment limits, RBI is looking to restrict it on 49 % for the new bank. The ministry also seems to be more accommodative on the issue of reducing stakes of promoters and shareholders of the new banks. The central bank is planning to increase the number of years for reducing the stake in banks. The plan is to raise it to 5 years. It has also suggested that the promoter holding in the bank could be set at 40% to begin with.

In the new norms, non-resident would not be allowed to hold more than 5% of paid up capital, the minimum paid-up capital is set at Rs 500 crore from Rs 300 crore for existing banks. Many large industrial houses have expressed their interest to enter into banking sector; however, as of now there is not clarity whether other candidates such as Indiabulls, Shriram Finance, Religare and Srei would be allowed to enter into banking space.

The S&P CNX Nifty is currently trading at 4,994.75, lower by 61.85 points or 1.22%. The index has touched a high and low of 5,078.60 and 4,977.20 respectively.  There were 15 stocks advancing against 35 declines on the index.
The top gainers of the Nifty were DLF up by 3.22%, RCom up by 2.92%, Bharti Airtel up by 0.91%, Hero Motors up by 0.90% and HUL up by 0.77%.
On the flip side, Wipro down by 4.44%, ICICI Bank down by 3.65%, Axis Bank down by 3.61%, TCS down by 3.51% and Jindal Steel down by 3.47% were the major losers on the index.
Most of the Asian equity indices were trading in the red; Shanghai Composite was down by 0.65%, Hang Seng was down 0.49 points, KLSE Composite was down by 0.19%, Nikkei 225 was down by 1.27%, Seoul Composite was down by 1.73% and Taiwan Weighted was down by 1.64%.
On the flip side, Jakarta Composite gained 1.41% and Straits Times was up by 0.27%.