GAP DOWN START

The Indian equity markets have made a gap down start and witnessed blood bath in early trade following subdued global equity indices. The US markets slumped on Friday on concern of global economic recovery and despite some good economic reports while, all the Asian counterparts were witnessing bloodbath at this point of time indicating somber investors' sentiments. Back home, Sensex fell below its crucial 16,200 mark while, Nifty, slipped below the 4,900-mark, with heavy selling in stocks like Reliance Industries, HDFC, HDFC Bank, ICICI Bank and Hindalco. Moreover, the domestic bourses reeling under pressure as there were just 2 gainers on the 30 Sensex stocks. On the sectoral front, metal, realty and banking remained the top losers on the BSE sectoral space while, there were no gainer on the index. Meanwhile, the metal and mining companies remained under pressure due to global weakness and some local issues. Stocks like, Hindalco, Sesa Goa, SAIL and JSL all were trading with a cut of 2-5 percent. The broader indices too were struggling to get some traction and were trading in the red at this point of time while, the market breadth has made a negative start; there were 579 shares on the gaining side against 1,314 shares on the losing side while 59 shares remained unchanged.
The BSE Sensex opened at 16,255.97; about 198 points lower compared to its previous closing of 16,453.76, and has touched a low of 16,088.98 while high remained its opening.
The index is currently trading at 16,119.79, down by 333.97 points or 2.03%. There were just 2 stocks advancing against 28 declines on the index.
The overall market breadth has made a somber start with 29.66% stocks advancing against 67.32% declines. The broader indices too were bleeding badly; the BSE Mid cap and Small cap indices were down by 1.56% and 0.91% respectively.
Metal down by 3.46%, Realty down by 2.83%, Bankex down by 2.64%, CD down by 2.32% and Power down by 1.83%, were the top losers on the index. While, there were no gainer on the index.
M&M up by 0.73% and Maruti Suzuki up by 0.43% remained the only gainers on the index, while, Jindal Steel down by 4.27%, Tata Power down by 4.21%, Hindalco down by 3.88%, Tata Steel down by 3.74% and DLF down by 3.16% were the top losers on the index.
Meanwhile, the governments on Friday further relaxed the foreign direct investment norms and increased the FDI limit in FM radio sector from 20% to 26% as a part of its half yearly review of the FDI policy for all sectors. Earlier in July, the government has allowed to increase the FDI in FM radio/terrestrial broadcasting to 26%. The move is expected to help over 30 media companies running 250 private FM radio stations in the India raise money from in abroad investors to fund their business in the next phase of extension.
Along with the FM radio/terrestrial broadcasting, the government also relaxed the FDI norms for the old-age homes and educational institutions. However, the conditions for FDI in contraction minimum and built-up area, capitulation and lock in period would not be applicable of these activities. The amended FDI policy will allow pledging of share to an overseas firm by Indian companies raising external commercial borrowings.
The government also allowed 100% FDI via automatic route in Apiculture under the controlled conditions. Apiculture is an important agro-based industry and has the potential of bringing in high economic returns with comparatively low levels of investment, the commerce and ministry statement said.
Beside Apiculture, the ministry also allowed FDI 100% via automatic route, in new industry parks. Under the existing regime, industrial parks cover specified sectors. The coverage has been expanded to specifically include research and development in bio-technology, pharmaceutical and life sciences, given the urgent need to augment research and development infrastructure in these areas as also expand the production facilities, ministry noted.
The government also allowed to conversion of imported capital goods/machinery and pre-operation expenses to equity instruments. However, Ministry has put some conditions like capital goods/machinery or retention of advance against equity should be made within 180 days of the shipment of capital goods/machinery or retention of advance against equity, and the payment via third party would not be allowed.
The policy has been amended to provide for pledge of shares of an Indian company which has raised external commercial borrowings, or that of its associate resident companies for the purpose of securing the ECB raised by the borrowing company, subject to conditions, ministry said.
The S&P CNX Nifty opened at 4,874.40; about 69 points lower compared to its previous closing of 4,943.25, and has touched a high and a low of 4,879.15 and 4,833.50 respectively.
The index is currently trading at 4,843.20, down by 100.05 points or 2.02%. There were just 7 stocks advancing against 43 declines on the index.
The gainers of the Nifty were Reliance Power up by 1.63%, GAIL up by 0.50%, M&M up by 0.40%, RCom up by 0.21% and Maruti Suzuki up by 0.14%.
Tata Power down by 4.56%, Jindal Steel down by 4.25%, Hindalco down by 4.11%, Tata Steel by 4.01% and HDFC was down by 3.45%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite was down 5.87 points or 0.25% to 2,359.47, Hang Seng was down 869.95 points or 4.95% to 16,722.46, Jakarta Composite was down 141.23 points or 3.98% to 3,407.81, KLSE Composite was down 28.48 points or 2.05% to 1,358.65, Nikkei 225 was down 225.05 points or 2.59% to 8,475.24, Straits Times was down 69.08 points or 2.58% to 2,606.08 and Taiwan Weighted was down by 195.75 points or 2.71% to 7,029.63.