SELLING PRESSURE

Indian equity markets are witnessing severe pounding in Wednesday afternoon trades and the frontline indices have receded to fresh lows in the session after selling pressure intensified across the board. Jittery investors squared of hefty positions from the rate sensitive Banking and Real Estate counters and dragged the benchmarks below the important psychological 4,700 (Nifty) and 15,700 (Sensex) levels. However, the key indices have found some support around the intraday lows and are paring some part of losses. The Asian peers too are exhibiting gloomy trends after disappointing Japanese industrial production and South Korean manufacturers' confidence data underscored the fact that the global economic recovery still remains uncertain and fragile. On the domestic front, consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the RBI has decided to purchase government securities worth Rs 12,000 crore in order to inject liquidity in the economy. On the BSE sectoral front, there appeared absolutely no index which managed to keep its head above the water while the rate sensitive Banking counter plummeted over two percent followed by the high beta Realty pocket which too traded with similar losses.
Moreover, the broader markets too traded with a negative bias with around half a percent losses, performing in line with their larger peers. The bourses plunged on larger volumes of over Rs 0.60 lakh crore. The market breadth on BSE was in favor of declines in the ratio of 1544:831 while 125 scrips remained unchanged.
The BSE Sensex is currently trading at 15,692.77 down by 181.18 points or 1.14% after trading as high as 15,887.80 and as low as 15,666.46. There were 6 stocks advancing against 24 declines on the index.
The broader indices were trading on a pessimistic note; the BSE Mid cap index plunged 1.23% and Small cap sank 0.86%.
On the BSE sectoral space, there were no gainers while Bankex down 2.21%, Metal down 2.05%, Realty down 1.92%, Oil & Gas down 1.58% and Consumer Durables down 1.37% were the major losers in the space.
Tata Power up 1.99%, NTPC up 0.99%, BHEL up 0.62%, Infosys up 0.19% and Hero Moto up 0.12% were the major gainers on the Sensex, while Jindal Steel down 5.53%, ICICI Bank down 3.24%, JP Associates down 2.41%, Sterlite down 2.41% and Hindalco down 2.34% were the major losers in the index.
Meanwhile, in its bid to inject liquidity in the economy, the Reserve Bank of India (RBI) has decided to purchase government securities worth Rs 12,000 crore on December 29, 2011. The central bank will conduct open market operations (OMO) for purchasing the securities through multi-security auction using the multiple price method, the apex bank said in a statement.
The move by RBI is consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions. The apex bank, in its mid quarter monetary policy review on December 16, 2011, had stated that OMOs would be conducted as and when considered appropriate.

The RBI statement opined that auction will be in four price methods, government security (G-Sec) maturing 2017 with a coupon of 7.49%, G-Sec maturing 2018 with a coupon of 7.83%, G-Sec maturing 2021 with 7.80% and G-Sec 2022 with 8.08%. While there is an overall aggregate ceiling of Rs 12,000 crore for all the securities in the basket put together, there is also no security-wise notified amount.

In the past month, the central bank has also purchased government securities of over Rs 24,311 crore from the money markets in three installments as part of its efforts to infuse liquidity into the system.
The S&P CNX Nifty is currently trading at 4,695.60, lower by 54.90 points or 1.16% after trading as high as 4,756.20 and as low as 4,694.85. There were 10 stocks advancing against 40 declines on the index.
The top gainers on the Nifty were Tata Power up 1.66%, NTPC up 1.47%, BHEL up 0.87%, Ambuja Cement up 0.34% and Infosys up 0.24%.
Jindal Steel down 5.39%, PNB down 3.95%, ICICI Bank down 3.53%, IDFC down 3% and JP Associates down 2.69% were the major losers on the index.
Asian markets traded largely on a negative note; Hang Seng declined 0.66%, Jakarta Composite shed 0.78%, Nikkei 225 slipped 0.20%, Straits Times eased by 0.30%, Seoul Composite dropped by 0.92% and Taiwan Weighted dipped by 0.40%.
On the flipside only Shanghai Composite added 0.08%.