The three straight session southbound journey of Indian stock markets showed little signs of coming to a halt on Monday as with absolutely no domestic triggers to take the markets higher, the gloomy global tidings have taken the center stage, prompting investors to take profits off the table. It is turning out to be a freefall of sorts as the benchmark equity indices are struggling to find a bottom in noon trades and have already slipped closer to the psychological 5,300 (Nifty) and 17,600 (Sensex) levels after getting bludgeoned by close to two percent. Investors fretted over spillover risks from the European region while heightened geopolitical tensions between the nuclear ambitious Iran and the West too dented investors' morale. Market participants are growing increasingly nervous amid worries the longest rally in international crude oil prices in two years would not only multiply India's fiscal woes but also adversely impact global economic growth. Though leads from the Asian markets too remain somber, however the local markets are underperforming all the indices with largest cuts in the region. The European futures too are indicating that markets there would commence trade on a bleak note. Fertilizer stocks like Rashtriya Chemical Fertilizers, Chambal Fertilizers and Deepak Fertilizers etc trended higher on the back of reports that a ministerial panel has given in-principle nod to the new fertilizer investment policy.
Moreover, the butchery was far more brutal in broader markets where the indices got pounded by around two and half a percent, underperforming their larger peers by a quite a margin. The bourses dived on weak volumes on the second day of a new F&O series while market breadth on BSE was dominantly in favor of declines in the ratio of 1905:629 while 101 scrips remained unchanged.
The BSE Sensex is currently trading at 17,614.73 down by 308.24 points or 1.72% after trading as high as 17,975.19 and as low as 17,606.65. There were 5 stocks advancing against 25 declines on the index.
The broader indices were trading on a bleak note; the BSE Mid cap index plummeted 2.46% and Small cap sank 2.38%.
On the BSE sectoral space, FMCG up 0.46% while Realty down 4.65%, Metal down 4.01%, Capital Goods down 3.91%, Power down 3.89% and Bankex 2.82% were the major losers in the space.
Cipla up 1.42%, Bharti Airtel up 0.83%, HUL up 0.62%, ITC up 0.60% and Sun Pharma up 0.40% were the only gainers on the Sensex, while Jindal Steel down 6.26%, BHEL down 5.35%, Tata Steel down 4.98%, DLF down 4.54% and Hindalco down 4.33% were the major losers in the index.
Meanwhile, profits of corporate India are expected to rise by 9.4% in the March quarter of 2012, as per data released by the Centre for Monitoring Indian Economy (CMIE). The banking sector is likely to be the main driver of this profit growth seeing a rise of 42.1% in net profit.
Indian corporates had incurred huge forex losses in the September and the December 2011 quarters because of a steep depreciation of the Indian rupee. However, the rupee is expected to appreciate in the March 2012 quarter, along with a moderation in input price inflation, which will pull up profits in the forthcoming quarter.
Profits for the entire financial year, however, are expected to be 9.5% lower than the year ago level. The net profit margin is also likely to drop to a decade low of 6%. The growth in sales though is expected to average at 22.2% for FY'12, which will come on top of an equally strong growth of 20.2% in FY'11. The growth in sales will be mainly driven by high unit realization.
The benefits of the increased prices are expected to accrue in the second half of the year as well, mainly on the back of increase in prices made by the companies in the first half of FY'12, due to rising costs of imported commodities such as crude oil, LNG, natural rubber and gold.
With interest rates remaining firm, the banking sector is also expected to witness a robust growth, and likely to continue in the second half as well. The RBI to combat inflation hiked interest rates 13 times since March 2010.
The S&P CNX Nifty is currently trading at 5,334.80, lower by 94.50 points or 1.74% after trading as high as 5,449.80 and as low as 5,330.05. There were 10 stocks advancing against 40 declines on the index.
The top gainers on the Nifty were Cipla up 1.45%, BPCL up 1.31%, ITC up 1.07%, HUL up 0.41% and Sun Pharma up 0.38%.
Seas Goa down 9.79%, Jindal Steel down 5.38%, IDFC down 5.11%, BHEL down 5.10% and DLF down 4.76% were the major losers on the index.
In the Asian space, Hang Seng slipped 0.31%, Jakarta Composite plunged 1.18%, Nikkei 225 eased 0.14%, Straits Times dropped 0.33%, Seoul Composite plummeted 1.42%.
On the flipside only Shanghai Composite advanced 0.55% and KLSE Composite inched up 0.03%.
Stock markets in Taiwan remained closed in observance of Peace Memorial Day holiday.
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