Monday 23 May 2011

Benchmarks witness blood bath in early trade; Nifty down 1%

The Indian equity markets have witnessed blood bath in the early trade tracking weak cues from the Asian counterparts as Euro-zone debt worries weighed on the investors' sentiment. All the Asian markets were bleeding badly at this point of time, indicating somber investors' sentiments. The US markets declined on Friday dragged down by retail stocks too dampened the sentiment. Back home, sustained selling mostly in all the heavyweights and broader indices were keeping the momentum on a negative side. NSE's -- Nifty -- lost its crucial 5,450 level as massive sell-off witnessed amid huge losses on other Asian bourses. On the sectoral front, realty, metal and auto were the major losers, while fast moving consumer goods remained the only gainer in the trade. The broader indices too have witnessed lackluster trade in the early morning session. Moreover, upstream companies like ONGC, OIL and GAIL slipped in early trade as they will have to pay around Rs 24,892  crore, Rs 3,293 crore and Rs 2,111 crore, respectively of the total subsidy burden of 78,000 crore and Sanghvi Forging and Engineering, the new listing made a flat debut on the bourses. The market breadth on the BSE was negative; there were 986 shares on the losing side against just 583 shares on the gaining side while 60 shares remained unchanged.

The BSE Sensex opened at 18,269.06; about 55 points lower compared to its previous closing of 18,326.09, and has touched a low of 18,106.99, while high remain its opening.

The index is currently trading at 18,155.48, down by 170.61 points or 0.93%. There were just 3 stocks advancing against 27 declines on the index.

The overall market breadth has made a weak start with 35.79% stocks advancing against 60.53% declines. The broader indices too were bleeding badly; the BSE Mid cap and Small cap indices lost 63% and 48% respectively.

FMCG up by 0.42% remained the lone gainer on the BSE while, Metal down by 1.75%, Bankex down by 1.51%, Auto down by 1.30%, IT down by 0.79% and HC down by 0.79%, were the major losers on the index.

ITC up by 1.13%, BHEL up by 0.77% and Bharti Airtel up by 0.29% were the only gainers on the index, while Tata Motors down by 2.25%, HDFC down by 2.23%, HDFC Bank down by 1.941.83%, Jaiprakash Associates down by 1.82% and Reliance Infra down by 1.74% were major losers on the BSE Sensex.

Meanwhile, the industry ministry is looking for Rs. 18,500 crore from cabinet to develop seven cities around the Delhi-Mumbai Industrial Corridor (DIMC). The DMIC is a mega infrastructure development project of $90 billion with the financial and technical help from Japan, covering an overall length of 1483 KMs between the political and commercial capitals of the nation.

The all seven cities would come up along Delhi Mumbai Rail Freight Corridor covering Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh. The department of industrial Policy and Promotion (DIPP) has obtained views of most the related ministries for the development project. And it's expected that DIPP will prepare a note for cabinet asking for funds.

Infrastructure like internal road, solid wastes disposal, flood management, storm water and sewage system, bus and rail-based public transportation system and landscaping will be developed with Rs. 17,500 and remaining Rs 1000 will be used for preliminary work of the project (as a Project Development Fund). Around Rs 2,500 crore would be spent on each city to build up basic infrastructure.

The planned new cities and sub-cities will be developed around the industrial hubs of Kushkhera-Bhiwadi-Neemrana in Rajasthan, Dadri-Noida-Ghaziabad in Uttar Pradesh, Bharuch-Dahej in Gujarat, Igatpuri-Nashik-Sinnar in Maharashtra and Pitampura-Dhar-Mhow in Madhya Pradesh. Subsequently, 17 extra cities are planned to be developed on a similar model.

The money for the development of project would be raised from the debt and equity and would be ploughed into The Delhi Mumbai Corridor Development Corporation (DMiCDC) which will be joint venture between government and IL& FS and IDFC. This investment is necessary to create basic infrastructure so that industrial and trading activities can come up. This money has to be put in by government even before public - private partnership (PPP) business model can be developed.

The S&P CNX Nifty opened at 5,456.70; about 30 points lower compared to its previous closing of 5,486.35, and has touched a low of 5,417.00 while high remain its opening.

The index is currently trading at 5,431.95, down by 54.40 points or 0.99%. There were just 4 stocks advancing against 46 declines on the index.

GAIL up by 0.96%, ITC up by 0.80%, BHEL up by 0.65% and Bharti Airtel up by 0.19% were the only gainers on the Nifty.

The top losers of the index were Sesa Goa down by 3.87%, IDFC down by 2.59%, HDFC down by 2.30%, Tata Motors down by 2.19% and Kotak Bank was down by 2.15%.

All the Asian counterparts were trading in the red; Shanghai Composite was down 55.31 points or 1.94% to 2,803.15, Hang Seng was down 401.11 points or 1.73% to 22,798.28, Jakarta Composite was down 58.71 points or 1.52% to 3,814.25, KLSE Composite was down 6.99 points or 0.45% to 1,534.04, Nikkei 225 was down 140.07 points or 1.46% to 9,467.01, Straits Times was down 40.68 points or 1.28% to 3,127.86, Seoul Composite was down 41.75 points or 1.98% to 2,069.75 and Taiwan Weighted was down 87.74 points or 0.99% to 8,749.29.


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