Benchmarks witness massacre in early trade

The Indian equity markets have witnessed massacre in the early trade tracking weak cues from Asian counterparts. Concerns over higher oil prices and the unrest in Libya spreading to other Middle East countries also dampen the sentiments. The US markets closed flat on Wednesday as the rise in crude prices once again started haunting the markets across the globe, while all the Asian equity indices were trading in the red at this point of time, indicating somber investors' sentiments. Back home, sustained selling in most of the heavyweights was keeping the momentum on a negative side. NSE's -- Nifty -- breached its crucial 5,500 level as investors booked their profits recorded during the previous two sessions. On the sectoral front, banking, software and metal were the major losers, while there were no gainers in the trade. The broader indices too were trading lower in the early morning session. Meanwhile, the PSU oil marketing companies BPCL, HPCL and IOC all were trading down in the range of 1% -1.5% amid buzz that the government is unlikely to allow them to raise fuel prices before key state elections starting in April. The market breadth on the BSE was negative; there were 711 shares on the losing side against 760 shares on the gaining side while 57 shares remained unchanged.

The BSE Sensex opened at 18,430.84; about 40 points lower compared to its previous closing of 18,469.95, and has touched a low of 18,309.88, while high remain its opening.

The index is currently trading at 18,315.83, down by 154.12 points or 0.83%. There were just 4 stocks advancing against 26 declines on the index.

The overall market breadth has made a negative start with 46.53% stocks advancing against 49.74% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices lost 0.83% and 0.19% respectively.

All sectoral indices on the BSE were trading down; Bankex down by 1.24%, IT down by 1.02%, Metal down by 0.95%, TECk down by 0.93% and Realty down by 0.84%, were the major losers on the index.

Reliance Infra up by 0.56%, Tata Motors up by 0.50%, HDFC up by 0.16% and M&M up by 0.12%, were the only gainers on the BSE.

On the flip side, ICICI Bank down by 1.75%, TCS down by 1.63%, SBI down by 1.58%, Bajaj Auto down by 1.42% and Hindalco down by 1.34% were the top losers on the index.

Meanwhile, as crude prices kept increasing, Libyan and Egyptian crisis causing uncertainties globally along with lots of domestic scams unfolding, Foreign Direct Investment (FDI) to India for the month of January 2011 declined by 48% to $1.04 billion compared with the year ago period. In January 2010, India attracted foreign direct investment (FDI) worth $2.04 billion. The sectors that attract FDI include services (financial and non-financial), telecommunications, housing and real estate, construction activities and power.

For the ten month period (April-January 2010-11) of the current fiscal, FDI declined 25% to $17 billion over the year ago period. The country had received $22.9 billion FDI during April-January 2009-10. "The numbers are bad. Going by the trend, it appears that India will receive less FDI in 2010-11 compared to the previous fiscal. The global economic recovery is fragile," CRISIL Principal Economist D K Joshi said, adding that it is a matter of great concern.

In 2009-10, the country's FDI had declined to $25.88 billion from $27.33 billion in the previous financial year. FDI inflows in October 2010 dropped around 40% to $1.4 billion over the year ago period. In November too, it declined by 7% to $1.6 billion. After falling consecutively in October and November 2010, in December last year, foreign direct investment in India increased by about 31% to $2 billion over the same period last year.

Countries including Mauritius, Singapore, US, UK, Netherlands, Japan, Germany and UAE are the major investors in India and with economic recovery in these countries, especially European nations, remaining fragile, FDI inflows to India is expected to be on the declining path only. Hence, RBI is planning to set a panel in order to find out the reasons for FDI slowdown and suggest ways to encourage it.

Meanwhile, as far as FII inflows are concerned, they too dipped in January, declining to $1.19 billion from $1.84 billion during the same period of January, 2010.

The S&P CNX Nifty opened at 5,516.10; about 15 points lower compared to its previous closing of 5,531.00, and has touched a high and a low of 5,516.30 and 5,482.15 respectively.

The index is currently trading at 5,483.75, down by 47.25 points or 0.85%. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Kotak Bank up by 2.05%, ICICI Bank up by 1.85%, TCS up by 1.80%, BPCL up by 1.75% and HCL Tech up by 1.65%.

The top losers of the index were Reliance Capital down by 2.18%, IDFC down by 1.21%, RCom down by 1.06%, Reliance Infra down 0.93% and ACC was down by 0.63%.

All the Asian equity indices were trading in the red; Shanghai Composite was down 30.05 points or 1.00% to 2,972.10, Hang Seng was down 149.32 points or 0.63% to 23,660.79, Jakarta Composite was down 15.37 points or 0.43% to 3,583.31, KLSE Composite was down 6.11 points or 0.40% to 1,517.58, Nikkei 225 was down 155.53 points or 1.47% to 10,433.97, Straits Times was down 15.53 points or 0.50% to 3,077.37, Seoul Composite was down 25.52 points or 1.28% to 1,975.95 and Taiwan Weighted was down by 107.62 points or 1.23% to 8,642.40.

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0nEwcbBxMnA==