PANIC SELLING

Indian markets are witnessing panic selling in the Wednesday afternoon trading session and the frontline equity indices have got obliterated by around three and half a percent to around the lowest levels seen in last two years. Market participants were seen ruthlessly squaring off hefty positions all across the board a day ahead of November series derivative contract expiry. Sentiments across the globe appeared gloomy as Asian markets exhibited dispiriting trends amid prolonged anxiety over the fate of global economic growth while the European shares too looked set to extend their downtrend for a fifth straight session. Investors' confidence got dented on getting the disappointing Chinese preliminary manufacturing PMI data which showed factory activity decelerated at a faster-than-expected pace to 32-month low levels in November while slower than estimated US growth too revived concerns of a global recession. Marketmen also overlooked the IMF's move to beef up its lending instruments and launch a six-month liquidity line, to bolster the flexibility and scope of its emergency programs to aid nations that may face liquidity problems. On the domestic front, the sugar stocks which rejoiced earlier on reports that the government has allowed sugar exports, too have plunged into the negative zone. On the BSE sectoral space, market participants booked hefty profits in the rate sensitive Bankex counters which got threshed by a massive around four percent while the Oil & Gas and technology counters also got butchered by around three and half a percent.
Moreover, the broader markets too got pulverized as they traded with large cuts of over two percent but were outperforming their larger peers. The bourses plummeted on extremely large volumes of well over Rs 1.26 lakh core mark on the penultimate day of November series F&O contract expiry. The market breadth on BSE was dominantly in favor of declines in the ratio of 1957:557 while 88 scrips remained unchanged.
The BSE Sensex is currently trading at 15,518.70 down by 546.72 points or 3.40% after trading as high as and 15,969.60 as low as 15,478.69. All 30 stocks were declining.
The broader indices were trading on somber note; the BSE Mid cap index plunged 2.14% and Small cap dived 2.03%.
On the BSE sectoral space, there were no gainers while Bankex down 3.90%, Oil & Gas down 3.77%, TECk down 3.44%, IT down 3.40% and Metal down 2.92% were the major losers in the space.
There were no gainers on the Sensex, while HDFC Bank down 6.49%, JP Associates down 5.13%, RIL down 4.58%, Jindal Steel down 4.44% and BHEL down 4.36% were the major losers in the index.
Meanwhile, in the wake of recent decline of Indian rupee against American dollar, the ministry of petroleum wants Rs 56,600 crore more in cash subsidy to partially compensate the government owned oil marketing companies for losses they incur on selling fuel below market cost.
G C Chaturvedi, Oil Secretary said that "at the current rates, under-recoveries (revenue loss) of oil marketing companies (OMCs) in the current fiscal is likely to be of the order of Rs 1,30,000 crore."The Oil Ministry wants the share of upstream companies like Oil and Natural Gas Corp (ONGC) to be limited to one-third of this revenue loss, or Rs 43,329 crore. "We would like their share to be one-third. The rest we want the Finance Ministry to bear," Chaturvedi said.
In the first half of the current financial year, the upstream companies ONGC, Oil India and GAIL bore one-third of the Rs 64,900 crore revenue losses on fuel sale. The finance ministry only gave Rs 30,000 crore and rest was borne by oil refiners, Indian Oil, Bharat Petroleum and Hindustan Petroleum. In the first half of 2011-12, the OMCs have suffered revenue loss of Rs 64,900 crore on selling diesel, kerosene and domestic cooking gas below market price.
Presently, OMCs are losing Rs 11.44 per litre on diesel, Rs 26.94 per litre on kerosene sold via the public distribution system (PDS) and Rs 260.50 per 14.2kg LPG cylinder supplied to domestic households for cooking purposes. As a result, the OMCs are incurring a daily revenue loss of around Rs 360 crore on sale of these three petroleum products. If the prices of these products are not revised, then by the end of the 2011-12, OMCs are expected to incur revenue loss of around Rs 130,000 crore.
The S&P CNX Nifty is currently trading at 4,654.65, lower by 157.70 points or 3.28% after trading as high as 4,779.50 and as low as 4,640.95. There were 2 stocks advancing against 48 declines on the index.
The top gainers on the Nifty were R Com up 1.21% and GAIL up 0.40%.

HDFC Bank down 5.97%, IDFC down 5.34%, JP Associates down 4.97%, Sesa Goa down 4.77% and Jindal Steel down 4.67% were the major losers on the index.

Asian markets continued to trade on a bleak note, Shanghai Composite dropped 0.55%, Hang Seng plummeted 1.99%, Jakarta Composite sank 1.47%, KLSE Composite shed 0.84%, Straits Times shaved-off 1.63% and Seoul Composite got battered by 2.36% and Taiwan Weighted nosedived 2.77%.
Japanese markets remained closed on Wednesday on account of Labor Thanksgiving day.