MARKETS CONTINUE TO SLIP

Barometer gauges after prolonging the previous session's consolidation mood in early trade on Tuesday have now magnified their losses as fresh concerns about the viability of a much-heralded plan to contain Europe's debt crisis, sapped the demand for riskier asset class.  Fears were fanned across the globe after China's manufacturing grew at a slower pace and after Greek Prime Minister George Papandreou pledged to put the European Union's agreement on financing for Greece to a referendum, which besides marring the sentiment at Asian markets also pulverized the trade at Dalal Street. Data on Tuesday showed that China's official Purchasing Managers Index fell to 50.4 in October compared with 51.2 in September, and undershot the median forecast of 51.7. The reading helped dampen sentiment in the region, as it placed an end to two consecutive months of increases, likely indicating that growth in manufacturing activity continued to slow as a result of Beijing's tightening measures and slowing global growth.  Meanwhile, US stocks ended October with steep losses. Investors worrying about the collapse of the brokerage MF Global and missing details in Europe's plan to contain the Greek debt crisis scurried out of equities. Last week, MF Global's debt was downgraded to junk status by ratings agencies concerned about its large holdings of European government debt.  The US future indices too continued to show downtick in the screen trade.
On the home turf, stocks from Capital Goods, Metal and Bankex counters languishing at the bottom, were contributing the most to benchmark losses. However, stocks from Consumer Durable, Healthcare and Public Sector Undertaking gaining some traction provided a lid to the bourses' downside. 30 share barometer index-Sensex-on BSE declining over a century of points was trading sub 17600 mark. Meanwhile, 50 shares widely followed index- Nifty-on NSE -surrendering over 0.50% was gyrating sub 5300 mark. The broader indices which too stood up in early trade pared gains by now. While stocks from midcap index racing ahead even slipped in red. The overall market breadth on BSE was in the favour of declines which piped advances in the ratio of 1119:960, while 112 shares remained unchanged.
The BSE Sensex is currently trading at 17,588.31, down by 116.70 points or 0.06%. The index has touched a high and low of 17,661.78 and 17,537.06 respectively.  There were 9 stocks advancing against 21 declines on the index.
The broader indices after outperforming frontline benchmarks in the early trade are currently trading mixed; the BSE Mid cap index was down by 0.06% and Small cap index gained 0.09%.
The top losing sectoral indices on the BSE were CG down by 1.22%, Metal down by 1.21%, Bankex down by 0.77%, FMCG down by 0.68% and Realty down by 0.36%.On the flip side, CD up by 0.37% HC up by 0.29% and PSU up by 0.09% were the gainers on the index.
The top gainers on the Sensex were Sun Pharma up by 2.15%, Wipro up by 1.86%, Tata Motors up by 1.26%, Tata Power up by 0.60% and Bharti Airtel was up by 0.47%.
On the flip side, Sterlite Industries was down by 3.69%, ICICI Bank was down by2.36%, L&T was down by 2.29%, Jindal Steel down by 1.56% and Cipla was down by 1.54% were the top losers on the Sensex.
Meanwhile, India's fiscal deficit for the first half of current financial year has crossed 70% of its full year target, validating fears that the government's ability to meet its fiscal deficit target could go skewed as economic slowdown crimps tax collections.
During April-September 2011, as per the government data, the fiscal deficit stood at Rs 2.92 lakh core, which is almost 71% of the Rs 4.13 lakh crore targets for the 2011-12.  This indicates that government may cross the fiscal target of 4.6% of gross domestic product (GDP). However, experts are of the view that the government's fiscal deficit to be around 5.5% of the GDP. 
Last year, in the same period, fiscal deficit was around 34.9% of the budgetary target, however, it was mainly because of the inflow of more than Rs 1 lakh crore from the auction of 3G spectrum. Last month, Finance Minister Pranab Mukherjee, had also expressed its concern over meeting the fiscal deficit target. In the current fiscal year, to meet any shortfall in small savings, the government has already planned to borrow around Rs 52,800 crore more in the second half of the year. But the capital markets are not convinced.
 The first three auctions of the government bonds in the remaining 6 months of 2011-12 have already passed on the primary dealer, although, yields on benchmark 10-year paper rising to 8.85% from 8.29% in the start of the year. In case of any shortfall of revenues, any further borrowing to meet the gap may prove very costly.
On the other hand, in order to control the expenditure finance ministry has asked other department and ministries to choke discretionary expenditure. However, modest growth in the tax revenue against budgeted 18.4% has hampered financial health of the government. Plan expenditure was around 40.3% of the budget estimates for the first half of 2011-12 compared to 45.5% in 2010-11.

In April-September 2011, the gross tax collections surged by 10.2% compared to last year. However, after setting aside the share of states it is only 4.1% due to heavy tax refunds. The slowdown of economic growth is now visible in the industrial growth which stood at 4.1% in August compared to 8% at the starting of 2011-12; therefore revenue collections has also moderated. Excise collections declined by 8% in September from last year, whereas customs collections increased by 7% because of the rupee depreciation.

The S&P CNX Nifty is currently trading at 5,287.60, down by 39.00 points or 0.73%. The index has touched a high and low of 5,310.85 and 5,275.50 respectively.  There were 13 stocks advancing against 37 declines on the index.
The top gainers of the Nifty were Sun Pharma up by 2.08%, Wipro up by 1.92%, Cairn India up by 1.34%, Tata Motors up by 1.23% and PNB up by 0.59%.
Sterlite Industries down by 3.77%, ICICI Bank down by 2.42%, L&T down by 2.28%, Cipla down by 2.00% and HCL Technologies down by 1.97%, were the major losers on the index.
Asian equity markets were trading mostly in the red; Hang Seng declined 1.41% to 19,584.69, Jakarta Composite lost 0.49%, KLSE Composite was down by 0.53%, Nikkei 225 plunged 1.43% and Straits Times descended 0.73%, Shanghai Composite edged lower by 0.01% and Seoul Composite declined by 0.03%.
On the flip side, Taiwan Weighted up by 0.42% was the sole gainer among the Asian pack.