MARKET BLEEDS

The Indian equity markets extended losses and currently trading at day's low in the late morning session. Investors were following the global cues and going on a selling spree across the board. Sensex slipped by more than 350 points, while Nifty lower by 100 points. Federal Reserve indicated significant downside risks to the economy on the last day of FOMC meeting yesterday. Also, Moody's Investors Service cut debt ratings on financial companies like Bank of America, Wells Fargo, and Citi. Meanwhile, Primary articles inflation for week ended September 10 has come in at 12.1% versus 13.04% (WoW), food articles inflation at 8.84% versus 9.47% (WoW) while fuel group inflation is at 13.96% versus 13.01% (WoW). On sectoral front all sectoral indices were trading negative. Metal, realty, bank, capital goods and automobile stocks were among the worst hit in the sell-off on the Indian bourses this morning. Several stocks from information technology, power and oil sectors were also down with sharp losses. FMCG, Pharma and consumer durables stocks were extended their early losses. On the global front, Asian markets were trading red and sharp fall in European futures too were pointing weak start to the European opening. Back home, the market breadth favoring the negative trend; there were 677 shares on the gaining side against 1,733 shares on the losing side while 93 shares remained unchanged.
The BSE Sensex is currently trading at 16,714.04, down by 351.11 points or 2.06%. The index has touched a high and low of 16,833.61 and 16,714.04 respectively. All the 30 stocks on BSE were on the declining side.
The broader indices too were bleeding profusely; the BSE Mid cap and Small cap indices were down by 1.53% and 1.34% respectively.
There was no gainer on the BSE Sectoral front, however, prominent losers on the BSE Sectoral front were Realty down by 2.94%, Metal down by 2.93%, Auto down by 2.40%, CG down by 2.34% and Bankex down by 2.32%.
Sterlite Industries down by 5.14%, Tata Motors down by 4.31%, DLF down by 3.33%, Bharti Airtel down by 3.13% and Jaiprakash Associate down by 3.11% were the top losers on the index.
Meanwhile, the organized retail trade in India is awaiting the cabinet nod on 51% Foreign Direct Investment (FDI) in multi-brand retail, based on recommendations made by the committee of secretaries (CoS). The government, however, has adopted the go slow approach for the opening of multi-brand retail for FDI. But the domestic retail players and trade associations are still divided on the issue. Prominent domestic players are demanding to open the multi-brand retail trade for FDI as investment will be used to build scale, reduce supply chain cost and improve efficiency in production.
The domestic retail player Kishore Biyani, founder and group CEO, Future Group is of the view that the FDI in retail will provide the much needed push to Indian retail industry by foreign capital, and the sector can maintain good pace of growth for coming 15-20 years. The FDI will help to break demand and supply mismatch by improving infrastructure and efficiency. 
The CoS has recommended that around 50% of FDI should be devoted for developing back-end infrastructure which is viewed as a speed breaker and main reason of commodity price fluctuations. As per the FICCI Secretary General Rajiv Kumar, FDI in retail will also help smaller producers, suppliers, farmers as well as consumers, he said 'the entire chain, from farm gate to consumer stands to benefit with FDI. Farmers will get more remuneration, while consumers will get better prices for products.'
The FDI is also expected to push India's exports. The China witnessed growth in exports after opening its retail sector for FDI. However, trade bodies like the Federation of Retail Traders Welfare Association (FRTWA) and Confederation of All India Traders (CAIT), are not in favor of opening retail sector for FDI, as it will affect the small kiranas and retailers hence affecting the employment scenario in sector. The Indian retail industry is mainly dominated by the unorganized and small retailers and big players like Wall Mart and Carry four are expected to wipe out the small retailers.
However, with reference to China's experience, Rajiv Kumar said, 'with FDI implementation, employment doubled in China and quadrupled in Thailand. Productivity also increased. It will create more jobs in India.'

On the same time, the industry experts and analyst are of the view that the opportunities made by 51% FDI in single brand retail and 100% in wholesale cash and carry business is not fully exploited. Since 2006, only Rs 306 crore of foreign investment has come into the Indian retail sector. The experts have the view that the role of government will be vital in the implementation of FDI into sector, but before that, industry needs to identify whether the need for FDI is driven by capital or capacity.

Industrial bodies are hopeful that a concrete decision will be taken by the cabinet in 3-6 months. The change in Indian consumer preference and demography structure, along with the increase in the income, Indian retail industry has become attractive destination for investment.
The S&P CNX Nifty is currently trading at 5,025.65, down by 107.60 points or 2.10%. The index has touched a high and low of 5,059.85 and 5,024.50 respectively. There were just 2 stocks advancing against 48 declining on the index.
The top gainers of the Nifty were BPCL up by 1.30% and ACC up by 0.78%. Meanwhile, Sterlite Industries down by 5.29%, Tata Motors down by 4.55%, SAIL down by 3.92%, RCom down by 3.51% and IDFC down by 3.48% were the major losers on the index.
All the Asian counterparts were trading in the red; Shanghai Composite was down by 1.86%, Hang Seng was down by 3.79%, Jakarta Composite was down by 6.13%, KLSE Composite was down by 1.29%, Nikkei 225 was down by 1.99%, Straits Times was down by 1.72%, Seoul Composite was down by 2.70% and Taiwan Weighted was down by 3.06%.