Stock markets in India have pruned some part of their losses in Monday afternoon trades with the benchmark equity indices trading with cuts of less than a percent. The frontline gauges, which had drifted around the psychological 4,800 (Nifty) and 15,800 (Sensex) marks, found some support around those levels and recovered slightly. After the initial gap down opening, the markets have shown marked resilience when compared to their regional counterparts. Most markets in the Asian region got brutally butchered by over two percentage points in the session as sentiments were spooked by terrifying over the weekend cues from US. The European markets too have got off to a weak opening with the German equity index plunging over a percent as the deteriorating financial crisis in Euro-zone and sharp slowdown in China dampened sentiments and prompted investors to flee riskier asset classes like equities. Back home, investors drew some solace from reports that Reserve Bank of India's deputy governor Subir Gokarn stating that the Reserve Bank has some room to reduce policy rates following a moderate core inflation and soft global oil prices in its mid-quarter policy review on 18 June. Moreover, the rupee, Asia's worst performing currency, reversed its early losses and strengthened 19 paise to 55.35 against the US dollar due to selling of dollars by banks and corporate and eased some concerns. Shares from the Auto sector traded lower as the monthly sales data were released. On the BSE sectoral front, investors were seen squaring off hefty positions from the high beta Realty counter which got battered by over two percent, being the top laggard in the space. Though largely across the board selling was evident, investors showed some buying interest in the Oil & Gas sector which traded with gains of around half a percent, thanks to the gains in heavyweights like Reliance Industries and ONGC.
Moreover, the broader markets continued to trade on a negative note with large cuts of around a percent, performing in tandem with their larger peers. The bourses expectedly fell on weak volumes of over Rs 0.5 lakh crore on the second day of a new F&O series while the market breadth on BSE was in favor of declines in the ratio of 1582:778 while 114 scrips remained unchanged.
The BSE Sensex is currently trading at 15,826.26 down by 138.90 points or 0.87% after trading as high as 15,868.16 and as low as 15,748.98. There were 4 stocks advancing against 26 declines on the index.
The broader indices were trading on a negative note; the BSE Mid cap index plunged 1.08% and Small cap index dropped 0.85%.
On the BSE sectoral space, Oil & Gas up 0.42% was the only gainer, while Consumer Durables down 3.75%, Realty down 2.24%, FMCG down 1.64%, Metal down 1.53% and Teck down 1.23% were the major laggards in the space.
ONGC up 1.52%, RIL up 0.88%, Hero Moto up 0.28% and Tata Motors up 0.13% were the only gainers on the Sensex, while DLF down 4.47%, GAIL India down 2.87%, Jindal Steel down 2.53%, Sterlite down 2.41% and Bharti Airtel down 2.24% were the major losers in the index.
Meanwhile, the confederation of Indian industry (CII) has demanded that the government should take immediate steps to revive the economy. These demands are coming on the back of the fact that economic growth has slowed down to a nine year low of 6.5%. CII is of the opinion that the slowdown in GDP numbers should serve as a wakeup call for the government and it should announce an 'economic revival package' to put the economy back on the path of growth.
Some of the measures suggested by the chamber are- a cut in the repo as well as the reverse repo rate by at least 100 basis points, speeding up the reform measures in multi-brand retail and civil aviation and bringing in the goods and services tax as early as possible. It has further suggested that the government should also make efforts to reduce the subsidy burden and take steps to incentivize exports.CII is of the view that these steps will not only speed up the economy but will also serve as sentiment boosters.
The CII President Adi Godrej has also suggested that to ease the pressure on the rupee, the RBI should open a temporary special window for importers of certain items, which have an inelastic demand such as crude oil, to meet their foreign exchange requirements. Further green efforts by the industry need to be encouraged by extending 25% weighted tax deduction on expenditure incurred on such initiatives.
It is noteworthy that the Indian economy is now showing clear signs of a slowdown. The growth rate of eight core infrastructure sectors like coal, cement, electricity, oil, and steel has halved to 2.2% in April against 4.2% a year ago. All major financial institutions like JP Morgan, Morgan Stanley, Stanchart and Citi have revised India's economic growth to 5.7- 6.3%, much lesser than the earlier estimates of over 7%.
The S&P CNX Nifty is currently trading at 4,801.60, lower by 40 points or 0.83% after trading as high as 4,807.95 and as low as 4,770.35. There were 9 stocks advancing against 41 declines on the index.
The top gainers on the Nifty were BPCL up 2.45%, ONGC up 1.87%, Ambuja Cement up 1.31%, JP Associates up 0.65% and Bank of Baroda up 0.64%.
Cairn down 6.08%, DLF down 4.41%, Jindal Steel down 2.79%, GAIL down 2.59% and Tata Power down 2.36% were the major losers on the index.
In the Asian space, Shanghai Composite got pummeled by 2.65%, Hang Seng plunged 2.31%, Jakarta Composite got decimated by 3.94%, KLSE Composite slumped 1.14%, Nikkei 225 sank 1.71%, Straits Times Index shunned 1.46%, KOSPI Composite Index got thrashed by 2.80% and Taiwan Weighted got pounded by 2.98%.
The European markets got off to a weak start as France's CAC 40 sank 0.57% and Germany's DAX fell 1.19%.
Stock markets in the United Kingdom remained closed on Monday for a national holiday.
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