SOUTH BOUND JOURNEY CONTINUES

After a day of relief, Indian benchmarks have resumed their south-bound journey in the Wednesday's morning trade with a gap-down opening tracking feeble global cues. Overnight, the US markets fell for the third straight day after Greece failed to form a government while, equity markets across the Asian region have got brutally assaulted in Wednesday's trading session with most benchmarks getting thrashed by around two percentage points. Back home, Sensex and Nifty lost their crucial 16,100 and 4,900 level respectively, led by most of the index heavyweight along with broader indices. Meanwhile, rupee hit a new five-month low on Wednesday, falling below the previous session low of 54.15 to the dollar and fast approaching a record low of 54.30 hit in December as global risk aversion intensified. Auto, realty, metal, banks, power and capital goods stocks were witnessing the selling pressure in early trade. Moreover, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 420 shares on the gaining side against 1,111 shares on the losing side while 62 shares remained unchanged. 

Meanwhile, rupee hit a new five-month low on Wednesday, falling below the previous session low of 54.15 to the dollar and fast approaching a record low of 54.30 hit in December as global risk aversion intensified.

The BSE Sensex opened at 16,132.68; about 196 points lower compared to its previous closing of 16,328.25, and has touched a low of 16,029.47 while high remain its opening.

The index is currently trading at 16,062.26 down by 265.99 points or 1.63%. There were only 2 stocks advancing against 28 declines on the index.

The overall market breadth has made a negative start with 26.37% stocks advancing against 67.94% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined 0.91% and 0.93% respectively.

The major losing sectoral indices on the BSE were, Auto down by 3.35%, Realty down by 2.06%, Metal down by 1.89%, Bankex down by 1.84% and Power down by 1.83%, while there were no gainers on the index.

The few gainers on the Sensex were Wipro up by 0.62% and TCS up by 0.54%.

On the flip side, Tata Motors was down by 6.13%, Maruti Suzuki was down by 3.44%, HDFC was down by 3.10%, BHEL was down by 2.70% and DLF was down by 2.62% were the top losers on the Sensex.

Meanwhile, the Federation of Indian Exporters Organization (FIEO) has asked the government to extend the interest subvention scheme on rupee credit for another one year in the upcoming annual supplement to the foreign trade policy (FTP) expected to be announced in the first week of June.

Ajay Sahai, the Director General of FIEO said that 'We are of the view that the interest subvention should be extended to all export-oriented sectors'. We are expecting the Commerce Ministry to move a proposal to the Finance Ministry on this.

The scheme ended on March 31, 2012. Exporters from handicrafts, handloom, carpet, and small & medium enterprises (SMEs) sectors were provided the benefit under the scheme.

FIEO further stated that the increase in bank interest rates for exporters from 7% to over 12% in a span of two years is a serious concern and it should be addressed in order to make Indian exporters competitive against its competitors.

The organization has also recommended that additional markets and new products should be included under the Focus Market Scheme (FMS) and the Market Linked Focus Product Scheme (MLFPS). All the export related schemes which are there at the moment for the benefit of the exporters should be continued.

The S&P CNX Nifty opened at 4,875.30; about 67 points lower compared to its previous closing of 4942.80, and has touched a high and a low of 4,882.25 and 4,854.35 respectively.

The index is currently trading at 4,860.90, lower by 81.90 points or 1.66%. There were only 6 stocks advancing against 44 declines on the index.

The top gainers of the Nifty were Cairn up by 3.31%, Bank of Baroda up by 2.35%, BPCL up by 1.76%, Wipro up by 0.59% and TCS up by 0.54%.

On the flip side, Tata Motors down by 6.25%, JP Associates down by 3.83%, Maruti Suzuki down by 3.72%, HDFC down by 3.23% and DLF down by 2.81%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite declined 9.94 points or 0.42% to 2,364.90, Hang Seng Index got hammered by 540.17 points or 2.72% to 19,354.14, Jakarta Composite got thrashed by 94.81 points or 2.34% to 3,950.84, KLSE Composite plunged 14.36 points or 0.92% to 1,546.71, Nikkei 225 sank 79.95 points or 0.90% to 8,820.79, Straits Times Index dived 34.78 points or 1.21% to 2,841.92, KOSPI Composite slumped 32.01 points or 1.69% to 1,866.95 and Taiwan Weighted was down by 64.01 points or 0.87% to 7,331.63.