Panic Selling has struck Dalal Street post the
release of dismal July IIP data and the bourses magnifying losses with
each passing minute, witnessing extreme selling pressure. Sharply lower
opening of European markets has further pounded the sentiment of the
local bourses as both CAC 40 and DAX 30 lost over 4% just at the start
of the trade. The shares dropped sharply on Monday, led by banking
stocks on concerns that policy makers were not doing enough to come up
with a permanent solution to the euro zone peripheral debt crisis as
worries intensified that Greece could default. Group of Seven finance
ministers agreed on Friday to respond in concert to a slowdown in the
global economy but produced no concrete action to calm markets, spooked
by signs of faltering growth and Europe's debt crisis. Meanwhile, in a
big disappointment, the July IIP number came much below the expected
3.3%, against 8.8% in June. July's IIP growth was the slowest rate of
growth in the last 24 months. On the global front, after dismal closing
of wall street, Asian equity indices too were in deep red. Meanwhile,
the US future indices are showing a downtick in the screen trade.
Back home, although bears were active across the board, stocks from Metal, IT and TECk counters were the prominent losers, while stocks from Fast Moving Consumers, Healthcare and PSU counters were the ones with the milder losses. The 30 share index- Sensex-after offloading over 300 points has lost its 16500 level, while Nifty-too registering losses in triple digit is trading sub 5000 mark. The broader indices too are trading lower with a cut of over 1.50% each. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1859:632, while 75 shares remained unmoved.
The BSE Sensex is currently trading at 16,495.37, down by 371.60 points or 2.20%. The index has touched a high and low of 16,668.25 and 16,463.04 respectively. Only 3 stocks were advancing against 27 declining ones on the index.
The broader indices remained clobbered out of shape; the BSE Mid cap and Small cap indices were down by 1.58% and 1.79% respectively.
Although selling was being witnessed across the board, Metal down by 3.15%, IT down by 3.10%, TECk down by 2.94%, CD down by 2.67% and Bankex down by 2.66% were the top losers on the index.
HUL up by 3.41%, Cipla up by 0.59% and ONGC up by 0.32% remained the top gainers on the Sensex. While, Jindal Steel down by 5.35%, Tata Motors down by 4.63%, Jaiprakash Associate down by 4.06%, Sterlite Industries down by 3.71% and ICICI Bank down by 3.66% were the top losers on the index.
Meanwhile, according to the Federation of Indian Chambers of Commerce and Industry's (FICCI) survey, most companies expects manufacturing sector growth to moderate in the second quarter of this financial year. Response from 324 manufacturing companies were taken, which showed that the around 74% of the respondents expect slowdown in growth in July-September 2011 from the same period of last fiscal. The chamber presented the findings to validate its appeal to the Reserve Bank of India not to raise policy rates any further.
According to the survey, around 7 out of 12 sectors were likely to experience moderation in growth rate in the second quarter from the corresponding period of last year. These sectors are consumer durables, cement, steel, textiles, chemicals, capital goods and tyres. However, sectors such as automobiles, auto components, leather and food processing are expected to achieve growth rate of more than 10% in the July-September 2011 from July-September 2010.
As per the survey, the respondents felt that the moderation in growth were because of two factors such as increase in the cost of capital and increase in prices of raw material. Around 75% respondent said raise in policy rates had significantly affected on their cost of borrowing. Because of tight monetary policy, the Chamber also expects surge in the bank's weighted average base rates to 10% mark for the first time.
It also stated that there would be a significant change in the demand conditions for the manufacturing sector in the second quarter, compared to previous quarters. Only 38% respondent said they have received higher orders from the first quarter. This moderation in the demand is also reflected in the fact that in June, growth of consumer goods had declined to 1.65%, which is the second lowest growth from October 2009. 'The situation is indeed serious and unless corrective measures are not taken to reverse this trend, we may see an impact on employment,' FICCI said.
The S&P CNX Nifty is currently trading at 4,934.35, down by 125.10 points or 2.47%. The index has touched a high and low of 4,985.60 and 4,928.55 respectively. There were just 5 stocks advancing against 45 declining ones on the index.
The major gainers of the Nifty were HUL up by 3.41%, Ambuja Cement up by 0.87%, Cipla up by 0.38%, Grasim Industries up by 0.35% and ONGC up by 0.19%.
HCL Technologies down by 5.67%, IDFC down by 4.48%, JP Associate down by 4.22%, Axis Bank down by 4.10% and Cairn India down by 4.06% were the major losers on the index.
All the Asian equity indices were trading in the red; Hang Seng down by 3.91%, Jakarta Composite down by 2.21%, KLSE Composite down by 1.58%, Nikkei 225 down by 2.31% and Straits Times down by 2.50%.
Stock markets in mainland China, Taiwan and South Korea were closed for a holiday.
The European indices have got off to sharply lower start, CAC 40 plunged 4.00 %, DAX 30 lost by 4.04% and FTSE 100 was down by 2.20%.
Back home, although bears were active across the board, stocks from Metal, IT and TECk counters were the prominent losers, while stocks from Fast Moving Consumers, Healthcare and PSU counters were the ones with the milder losses. The 30 share index- Sensex-after offloading over 300 points has lost its 16500 level, while Nifty-too registering losses in triple digit is trading sub 5000 mark. The broader indices too are trading lower with a cut of over 1.50% each. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1859:632, while 75 shares remained unmoved.
The BSE Sensex is currently trading at 16,495.37, down by 371.60 points or 2.20%. The index has touched a high and low of 16,668.25 and 16,463.04 respectively. Only 3 stocks were advancing against 27 declining ones on the index.
The broader indices remained clobbered out of shape; the BSE Mid cap and Small cap indices were down by 1.58% and 1.79% respectively.
Although selling was being witnessed across the board, Metal down by 3.15%, IT down by 3.10%, TECk down by 2.94%, CD down by 2.67% and Bankex down by 2.66% were the top losers on the index.
HUL up by 3.41%, Cipla up by 0.59% and ONGC up by 0.32% remained the top gainers on the Sensex. While, Jindal Steel down by 5.35%, Tata Motors down by 4.63%, Jaiprakash Associate down by 4.06%, Sterlite Industries down by 3.71% and ICICI Bank down by 3.66% were the top losers on the index.
Meanwhile, according to the Federation of Indian Chambers of Commerce and Industry's (FICCI) survey, most companies expects manufacturing sector growth to moderate in the second quarter of this financial year. Response from 324 manufacturing companies were taken, which showed that the around 74% of the respondents expect slowdown in growth in July-September 2011 from the same period of last fiscal. The chamber presented the findings to validate its appeal to the Reserve Bank of India not to raise policy rates any further.
According to the survey, around 7 out of 12 sectors were likely to experience moderation in growth rate in the second quarter from the corresponding period of last year. These sectors are consumer durables, cement, steel, textiles, chemicals, capital goods and tyres. However, sectors such as automobiles, auto components, leather and food processing are expected to achieve growth rate of more than 10% in the July-September 2011 from July-September 2010.
As per the survey, the respondents felt that the moderation in growth were because of two factors such as increase in the cost of capital and increase in prices of raw material. Around 75% respondent said raise in policy rates had significantly affected on their cost of borrowing. Because of tight monetary policy, the Chamber also expects surge in the bank's weighted average base rates to 10% mark for the first time.
It also stated that there would be a significant change in the demand conditions for the manufacturing sector in the second quarter, compared to previous quarters. Only 38% respondent said they have received higher orders from the first quarter. This moderation in the demand is also reflected in the fact that in June, growth of consumer goods had declined to 1.65%, which is the second lowest growth from October 2009. 'The situation is indeed serious and unless corrective measures are not taken to reverse this trend, we may see an impact on employment,' FICCI said.
FICCI
survey also showed the decline in capacity utilization in the
July-September 2011, only 36% of responded said that their capacity
utilization levels were more than the corresponding period last year. In
April-June 2011, 53% respondent reported that they were operating at
higher capacities from the corresponding period last year. The capacity
utilization levels were low in sectors like textiles, consumer
electronics and electrical sector. On the other hand, in July-September
2011, only 41% of respondents said that they will go for capacity
addition in next six months, which is significantly less from the
April-June 2011 period.
Around 52% respondents had plans of capacity
additions in the next six months. Sectors where a majority of the
respondents reported that capacity additions were not coming through are
textiles, steel, capital goods, cement, electrical and consumer
electronics. In other sectors, such as automobiles, auto components,
chemicals and leather, there is going to be a moderate increase in
capacities. Around 57% of respondents said that they were not planning
to increase their workforce in the next three months, from 54% in the
previous survey. 'So, we are not expecting a better employment outlook
in manufacturing in the coming months in a majority of the sectors
covered by the survey,' said FICCI. The S&P CNX Nifty is currently trading at 4,934.35, down by 125.10 points or 2.47%. The index has touched a high and low of 4,985.60 and 4,928.55 respectively. There were just 5 stocks advancing against 45 declining ones on the index.
The major gainers of the Nifty were HUL up by 3.41%, Ambuja Cement up by 0.87%, Cipla up by 0.38%, Grasim Industries up by 0.35% and ONGC up by 0.19%.
HCL Technologies down by 5.67%, IDFC down by 4.48%, JP Associate down by 4.22%, Axis Bank down by 4.10% and Cairn India down by 4.06% were the major losers on the index.
All the Asian equity indices were trading in the red; Hang Seng down by 3.91%, Jakarta Composite down by 2.21%, KLSE Composite down by 1.58%, Nikkei 225 down by 2.31% and Straits Times down by 2.50%.
Stock markets in mainland China, Taiwan and South Korea were closed for a holiday.
The European indices have got off to sharply lower start, CAC 40 plunged 4.00 %, DAX 30 lost by 4.04% and FTSE 100 was down by 2.20%.
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