SHORTING CONTINUES

Indian equity markets continued to languish deep down in the red on sustained selling almost across the board, following weak global cues. However fragile economic data from the US, concerns about the financial situation in Europe and the Indian currency's sustained weakness against the US dollar all were contributing in equal measure to the market's decline. Nifty hovering around 5,000 mark, while Sensex plunged by 296 points. On sectoral front all sectors were trading in red. On the global front, Asian markets opened on a weak note this morning, and are still mostly down with sharp losses. Back home, the market breadth favoring negative trend; there were 684 shares on the gaining side against 1,674 shares on the losing side while 90 shares remained unchanged.

The BSE Sensex, plunging by 296.51 points or 1.76% was trading at 16,534.57. The index has touched a high and low of 16,620.44 and 16,516.77 respectively.  There were only 3 stocks advancing against 27 declines on the index.

The broader indices too continued to reel under pressure; the BSE Mid cap and Small cap indices declined by 1.73% and 1.34% respectively.

Selling was broad based though, but the major losing sectoral indices on the BSE were, Realty down by 2.99%, Bankex down by 2.63%, Metal down by 2.01%, Information Technology (IT) down by 1.92% and PSU down by 1.67%.

SBI down by 3.64%, Hero MotoCorp down by 3.20%, HDFC Bank down by 2.84%, Sterlite Industries down by 2.67% and Mahindra & Mahindra down by 2.56% were the top losers on the Sensex.

However, BHEL up by 0.65%, Cipla up by 0.49% and Sun Pharmaceuticals up by 0.17% were the top gainers on the Sensex.

Meanwhile, despite a slowdown in demand from the western countries, India has set a target of $38 billion for textile exports this year. The target is 12% higher than that of last year's $34 billion as India is expecting to tap newer markets of Africa and Latin America.

The US and European markets account for over 50% of India's exports and are currently facing an economic slowdown. Hence India has resorted to exploring the markets of Africa and Latin America which it believes have tremendous potential.

India's textiles export performance has continued to lag its global competitors in the last few years. It has a meagre 4.3% share of the world market, compared to China's 28.3%. The Indian apparel industry is facing several challenges like labour, safety and health compliances in the global market which are affecting its competitiveness.

Moreover according to estimates, the share of textiles and clothing as a percentage of the country's overall export basket decreased from 15.97 percent in 2004-05 to 8.9 percent in 2010-11. The sector, which is the country's second largest employment generator after agriculture, employing 35 million people, was hit hard by the global economic slowdown.

The Economic Survey 2011-12 too had stated that India needs to diversify its export markets as its trading partners may resort to protectionist measures in the wake of global economic uncertainty.

The S&P CNX Nifty is currently trading at 4,994.55, lower by 92.30 points or 1.81%. The index has touched a high and low of 5021.15 and 4990.35 respectively. There were only 5 stocks advancing against 45 declines on the index.

The top gainers of the Nifty were BPCL up by 2.14%, BHEL up by 0.86%, Ambuja Cement up by 0.53%, Cipla up by 0.31% and Sun Pharma up by 0.06%.

On the flip side, JP Associates down by 5.13%, Cairn India down by 4.94%, SBI down by 3.72%, SAIL down by 3.36% and Bank of Baroda down by 3.32% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite declined 0.41%, Hang Seng plunged 2.73%, Jakarta Composite descended 1.95%, KLSE Composite shed 0.44%, Nikkei 225 plummeted by 2.78%, Straits Times descended by 2.27%, KOSPI Composite slid 1.64% and Taiwan Weighted lost 2.11%.