WEEK STARTS ON DEPRESSING NOTE

Indian equity bourses commenced the fresh week on a depressing note as the benchmark indices extended previous week's sell-off and sank by close to a percentage points to the lowest levels since August 2009. Though, the frontline indices quadrupled the sorrow of closing in the negative terrain yet they managed to hold on to important psychological 4,600 (Nifty) and 15,300 (Sensex) levels. There appeared some recovery in the last late hours of trade as the key gauges managed to pare over a percentage point from the session's lows on the back of short covering in some heavyweight stocks like Reliance Industries and also on getting some supportive leads from European share markets. However, sentiments largely remained pessimistic in the local markets amid heightened worries about the uncertainty looming over Europe's future and also amid the gloomy domestic macro-economic headwinds. Discouraging developments from Europe continued to dissuade investors amid heightened worries that potential credit ratings downgrades of several Euro-zone nations may derail progress towards resolving the region's onerous debt problem. In addition, fears of political instability in the Asian region increased after reports that the mercurial leader Kim Jong Il of nuclear-armed North Korea has died. Back home, sentiments were also undermined after an influential securities firm CLSA downgraded India's weight in its relative-return portfolio by two percentage points to 11%, citing the rising subsidies bill and broadening fiscal deficit as concerns. Meanwhile, cabinet has approved a populist but hugely costly bill to provide subsidized food grains to over 64% of the country's population and will cost Rs 1,50,000 crore to the tax payer. But the bill once approved will increase the government's annual food subsidy bill by nearly $5.3 billion, thus increasing financial burden on the government at precisely the wrong time.
Earlier on Dalal Street, the benchmark got off to a somber opening, extending the downtrend for the fourth straight session as pessimistic sentiments prevailed across Asian markets. The selling pressure accentuated in the mid morning trades as investors took to across the board risk aversion. The key gauges made some attempts to claw back into the green zone in early afternoon trades but profit booking at higher levels dragged the key indices to the lowest point in the session. However, late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with relatively small losses. The NSE's 50-share broadly followed index - Nifty plunged by around a percent to settle above the crucial 4,600 support level while Bombay Stock Exchange's Sensitive Index - Sensex took a triple digit cut and closed below the psychological 15,400 mark. Moreover, the broader markets too finished on a daunting note with around two percent losses, underperforming their larger peers by a flat margin. On the BSE sectoral front, the Capital Goods pocket bore the maximum brunt of selling pressure as it got thrashed by about three and half a percent, followed by the rate sensitive Banking index, which too went home with hefty losses of over 3%. On the other hand, the Oil & Gas pocket remained the top gainer in the space after heavyweight Reliance Industries made its presence felt by surging close to two percent. The defensive FMCG and rate sensitive Automobile pockets too managed a close in positive territory with moderate gains. The markets slipped on weaker volumes of over Rs 1.50 lakh crore while the turnover for NSE F&O segment too remained on the lower side as compared to Friday at over 1.36 lakh crore. The market breadth was awfully pessimistic as there were 726 shares on the gaining side against 2,066 shares on the losing side while 91 shares remained unchanged.
Finally, the BSE Sensex shaved off 112.01 points or 0.72% to settle at 15,379.34, while the S&P CNX Nifty sank by 38.50 points or 0.83% to close 4,613.10.
The BSE Sensex touched a high and a low of 15,440.10 and 15,190.74 respectively. The BSE Mid cap and Small cap index were down by 1.99% and 5.50% respectively.
The major gainers on the Sensex were Tata Motors up 4.44%, Coal India up 1.89%, RIL up 1.78%, HUL up 1.07% and ITC up 0.95%. While, L&T down 4.29%, Jindal Steel down 3.74%, DLF down 3.39%, SBI down 3.24% and HDFC Bank down 3.15% were the major losers on the index.
On the BSE sectoral space, Oil & Gas up 0.96%, FMCG up 0.61% and Auto up 0.22% were the only gainers while Capital Goods (CG) down 3.48%, Bankex down 3.08%, Realty down 2.89%, Power down 1.60% and PSU down 1.59% were the major losers on the BSE sectoral space.
Meanwhile, even as uncertainty over the Euro-zone debt crisis looms and domestic economy continues to slow, Indian government remains confident of doubling exports to $500 billion by 2013-14, with a compound average growth of 26.7% per annum. The commerce ministry's goal in the medium-term as outlined in the Foreign Trade Policy (FTP 2009-14) is to double India's exports of goods and services by 2014 with a long term objective of doubling India's share in global trade by the end of 2020 through appropriate policy support.
Union Commerce Minister, Anand Sharma in his strategy for doubling exports has outlined four pronged strategy namely, Product Strategy; Market Strategy; Technologies and R&D and Building a Brand image. The strategy paper underscored that considerable growth potential is likely in engineering goods, basic chemicals and organic and inorganic chemicals, pharmaceuticals (including biotech) and electronics to boost exports.
The commerce minister also stated that the government will provide necessary policy support needed to realize the ambitious export targets for 2013-14 and beyond. The government proposes to continue the existing incentive schemes and aims to follow a stable policy environment while providing preferential access to new markets and putting in place conducive trading arrangements.
The S&P CNX Nifty touched a high and low of 4,623.15 and 4,555.90, respectively.

The top gainers on the Nifty were Tata Motors up 4.41%, Cairn up 4.06%, SAIL up 3.48%, Coal India up 1.98% and Reliance up 1.96%. On the flip side, Axis Bank down 5.91%, L&T down 4.13%, PNB down 4.05%, R Com down 3.51% and Jindal Steel down 3.49% were the top losers on the index.

The European markets were trading on a mixed note. France's CAC 40 up 0.64%, Britain's FTSE 100 down by 0.13%, and Germany's DAX was up by 0.72%.
Asian stocks resumed the declining trend on Monday and snapped the session on a daunting note. Most indices in the region settled with large cuts in the range of 1-4% in the session as sentiments not only got dented from discouraging developments from the European front but also reports of the death of mercurial North Korea's leader Kim Jong Il added to uncertainties facing markets in the region. Earlier in the session, reports that Moody's slashed the Belgium's credit rating to Aa3 with a negative outlook, from Aa1, undermined sentiments which led investors to flee from risky asset classes like equities. Investors also took profits off the table ahead of EU finance ministers' talk on the region's debt crisis, scheduled later in the day.
Seoul shares got thrashed by around three and half a percent, after North Korean state television said North Korean leader Kim Jong-il had died, sending most heavyweight stocks including Samsung Electronics tumbling. Tokyo stocks too closed sharply lower after falling over a percentage points.