PESSIMISTIC

Indian equity markets stung by the Federal Reserve's pessimistic assessment of the U.S. economy and the perceived ineffectiveness of measures taken to kickstart growth of the world largest economy again, are resting in red with deep and grave losses. However, local bourses after getting a dismal start tracking the daunting global leads have now enlarged their losses owing to the growing risk -averse climate and also as market men are opting to stay at the bay ahead of the release of the weekly food inflation data. On the global front, US stocks plunged over 2% as Federal Reserve said the economy faced 'significant downside risks' even as the Fed took another stab at boosting growth. The U.S. central bank said it would sell $400 billion of short-term Treasury bonds to buy the same amount of longer-term U.S. government debt, its latest attempt to kickstart growth that slowed to a crawl over the first half of the year. Meanwhile, Asian shares too drawing negative out of the latest development pummeled in the early trade. The US future indices were showing a downtick in the screen trade. Back home, frenzied selling was witnessed across the board, however, stocks from Realty, Metal and Auto counters contributed the most to the downside of the bourses. The 30 share sensitive index on BSE-Sensex- tanking over 300 points had lost its crucial 17000 psychological level. Meanwhile, the broadly followed 50 share index-Nifty-shrugging off close to 100 points was far away from its 5100 mark. The broader indices too following the style and pattern of the larger counterparts were trading lower over 1% each. The overall market breadth on BSE was in the favour of declines which outpaced advances in the ratio of 1557:611, while 72 shares remained unchanged.
The BSE Sensex is currently trading at 16,743.24, down by 321.91 points or 1.89%. The index has touched a high and low of 16,833.61 and 16,732.34 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 1.43% and 1.28% respectively.
Selling was witnessed across the board, however, prominent losers on the BSE Sectoral front were Realty down by 2.71%, Metal down by 2.46%, Auto down by 2.27%, Bankex down by 2.21% and CG down by 1.90%.
Tata Motors down by 4.07%, Sterlite Industries down by 3.99%, DLF down by 3.26%, Jaiprakash Associate down by 3.11% and Tata Steel down by 2.80% were the top losers on the index.
Meanwhile, a number of factors like, reduction in retailer commission, increase in tariff rates and strict identity verification requirements, have negatively affected the monthly mobile subscriber addition. In August, the Mobile phone service providers on the GSM technology added only 5.4 million subscribers, which is almost 30% less compared to July, which added around 7.64 million. The Indian telecom sector is dominated by the GSM technology for communication. The GSM (Global Standard for Mobile) accounts for more than 600 million subscribers all over India and on the other hand, CDMA (Code Division Multiple Access), accounts for 219 million.
As per the data released by the Cellular Operators Association of India, in the month of August Idea Cellular added around 2.3 million new subscribers almost 132% of jump in new connections from last month. While, Bharti Airtel and Vodafone which accounts for more than 50% of the GSM market added 1.1 million each in the month August.
Whereas, companies like STel and Videocon, witnessed decline in subscriber addition in August. The new telecom operators like Videocon continued its losing streak and lost around 652,000, and STel also lost around 67,000 customers in August. This fall in connections from new players, indicate that customers moved to established telecom companies.
While, this moderation was expected in new connections, as cities are getting saturated with mobile subscribers and telecom companies are going slow with their rural operations. However, the decline has come in at a much sharper pace than expected. As per the Telecom Regulatory Authority of India, the urban tele-density is more than 150% whereas the rural tele-density is still around 30-40%, which indicates huge opportunity of growth.
On the other hand, telecom companies are going slowly on rural expansion, as it requires more capital and investment. Tele firms have to set up new towers to improve coverage in rural areas, where they don't have adequate presence. As the focus on urban subscriber addition reduced, service providers have also cut back on expenses by reducing commission for retail agents who sell new mobile connections. Along with the reduction in commission, telecom firms like Bharti, Vodaone, Idea and Reliance Communications has recently increased the call tariffs by around 20% mostly for calls within their respective networks.

The S&P CNX Nifty is currently trading at 5,034.00, down by 99.25 points or 1.93%. The index has touched a high and low of 5,059.85 and 5,031.05 respectively. There was just 1 stock advancing against 49 declining on the index.

The only gainers of the Nifty were BPCL up by 1.38%. Meanwhile, Tata Motors down by 4.25%, Sterlite Industries down by 3.99%, SAIL down by 3.74%, DLF down by 3.35% and IDFC down by 3.17% were the major losers on the index.
All the Asian counterparts were trading in the red; Shanghai Composite was down by 1.74%, Hang Seng was down by 4.08%, Jakarta Composite was down by 6.13%, KLSE Composite was down by 1.29%, Nikkei 225 was down by 1.97%, Straits Times was down by 1.81%, Seoul Composite was down by 3.09% and Taiwan Weighted was down by 2.69%.