Losses for BSE Small-Cap, Mid-Cap indices exceed Sensex's slide

Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in nearly three weeks. The market breadth indicating the overall health of the market was weak. The Sensex was currently off 242.27 points or 0.85% at 28,199.83. The BSE Mid-Cap index was off 1.31%. The BSE Small-Cap index was off 1.13%. The decline in both theses indices was higher than the Sensex's decline in percentage terms. Losses ranged from 2% to about 17% for quite a few stocks which are the constituents of the BSE Small-Cap index.

In overseas markets, Asian stocks edged lower after China's securities regulator after on Friday, 17 April 2015, tightened rules on margin lending and the Chinese local stock exchanges eased restrictions on short-selling of stocks. The announcement came after end of the trading session in Asian markets on Friday, 17 April 2015.

IT stocks dropped on reports that Indian IT companies are losing market share as IT outsourcing companies clients are increasingly favouring local firms while awarding technology contracts. Realty shares were trading lower. Shares of public sector banks were mixed.

Meanwhile, data released by the government after trading hours Friday, 17 April 2015, showed that India's merchandise exports (including re-exports) dipped 21.06% to $23951.16 million in March 2015 over March 2014

Foreign portfolio investors sold shares worth a net Rs 675.71 crore during the previous trading session on Friday, 17 April 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 72.52 crore on Friday, 17 April 2015, as per provisional data released by the stock exchanges.

At 11:16 IST, the S&P BSE Sensex was down 242.27 points or 0.85% at 28,199.83. The index fell 252.93 points at the day's low of 28,189.17 in mid-morning trade, its lowest level since 1 April 2015. The index rose 97.36 points at the day's high of 28,539.46 at the onset of trading session.

The CNX Nifty was down 74.90 points or 0.87% at 8,531.10. The index hit a low of 8,529.15 in intraday trade, its lowest level since 1 April 2015. The index hit a high of 8,619.95 in intraday trade.

The BSE Mid-Cap index was down 140.95 points or 1.31% at 10,630.82. The BSE Small-Cap index was down 131.89 points or 1.13% at 11,490.34. The decline in both theses indices was higher than the Sensex's decline in percentage terms.

The market breadth indicating the overall health of the market was weak. On BSE, 1,494 shares fell and 829 shares rose. A total of 90 shares were unchanged.

IT stocks dropped on reports that Indian IT companies are losing market share as IT outsourcing companies clients are increasingly favouring local firms while awarding technology contracts. MindTree (down 5.09%), Infosys (down 2.58%), TCS (down 1.42%), Tech Mahindra (down 1.41%), CMC (down 1.32%), MphasiS (down 1.15%), HCL Technologies (down 0.95%), Oracle Financial Services Software (down 0.94%) and Wipro (down 0.4%), edged lower. Hexaware Technologies was up 1.18%.

According to the report, Indian software services exporters won about 8% of total deals awarded by customers during the January-March period, down from about 13% in the April-June period of the fiscal year 2014-15. In terms of total value, this ratio, too, dropped from around 12% down to just 7% over the course of the year.

Most realty shares were trading lower. Oberoi Realty (down 4.09%), Anant Raj (down 3.87%), D B Realty (down 2.72%), Housing Development and Infrastructure (HDIL) (down 2.7%), Indiabulls Real Estate (down 1.84%), DLF (down 1.53%), Parsvnath Developers (down 1.51%), Sunteck Realty (down 1.3%), Godrej Properties (down 1.23%), Peninsula Land (down 0.67%) and Prestige Estates (down 0.11%), edged lower. Phoenix Mills (up 0.65%) and Sobha (up 0.66%), edged higher.

Among other bills, the government is keen about both the Houses of Parliament taking up for consideration the Real Estate (Development & Regulation) Bill during the second part of the Budget session. The second part of the ongoing Budget session of Parliament begins today, 20 April 2015 with the reconvening of the Lok Sabha.

Shares of public sector banks were mixed. Bank of Maharashtra (down 1.53%), Bank of India (down 1.16%), Punjab and Sind Bank (down 1.14%), UCO Bank (down 0.51%), United Bank of India (down 0.51%), Indian Bank (down 0.39%), Andhra Bank (down 0.24%), Vijaya Bank (down 0.21%), Allahabad Bank (down 0.19%), Central Bank of India (down 0.1%), Corporation Bank (down 0.08%) and State Bank of India (down 0.02%), edged lower. Canara Bank (up 0.05%), Dena Bank (up 0.10%), IDBI Bank (up 0.37%), Syndicate Bank (up 0.65%), Punjab National Bank (up 0.95%), Bank of Baroda (up 1.21%) and Union Bank of India (up 1.43%), edged higher.

The Department of Financial Services (DFS), Ministry of Finance yesterday, 19 April 2015, announced that it will hold a meeting with CMDs of Public Sector Banks (PSBs) on 28 April 2015 at the RBI headquarter in Mumbai to understand the problems faced by the project promoters and the banks in retrieving them and to find-out a solution to such problems in the light of the fact the level of non performing assets (NPAs) and the stressed projects of public sector banks (PSBs) have been showing an upward trend in the last four quarters. In this meeting, case by case review of some of the major projects of infrastructure sector such as road, power, steel and shipping would be undertaken by the DFS in the presence of senior officers of the ministries of power, steel, transport, shipping and the senior officers of the Reserve Bank of India (RBI). This meeting would help the department to crystalise the actions required by banks, Ministry of Finance and other concerned Central Ministries as well as support required from RBI, according to a statement from the Finance Ministry.

Meanwhile, data released by the government after trading hours Friday, 17 April 2015, showed that India's merchandise exports (including re-exports) dipped 21.06% to $23951.16 million in March 2015 over March 2014. Imports fell 13.44% to $35744.68 million in March 2015 over March 2014. Oil imports declined 52.68% to $7413.30 million in March 2015 over March 2014. Non-oil imports rose 10.55% to $28331.38 million in March 2015 over March 2014. The trade deficit for fiscal year 2014-15 was estimated at $137014.46 million, which was higher than trade deficit of $135797.90 million for fiscal year 2013-14.

Proceedings in the parliament during the second half of the Budget session which began today, 20 April 2015, are being closely watched as the government hopes to pass the Constitution Amendment Bill for the introduction of a nationwide Goods and Services Tax (GST) in the country. The government had tabled the Constitution Amendment Bill for GST in the Lok Sabha during the winter session of parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.

In overseas markets, stocks edged lower amid high volatility in mainland China as investors reacted to moves by regulators related to stock trading and monetary easing. The People's Bank of China (PBOC) yesterday, 19 April 2015, announced reduction in reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5% to be effective from 20 April 2015.

Meanwhile, China Securities Regulatory Commission (CSRC) on Saturday, 18 April 2015, stressed that there was no desire to suppress the hot stock market after unveiling a raft of measures on Friday, 17 April 2015, to curb margin trading. Meanwhile, the Shanghai and Shenzhen stock exchanges on Friday, 17 April 2015, issued rules that would make it easier for investors to short, or bet against, stocks. To short a stock, an investor borrows shares and sells them, hoping the price will fall and so allow them to repay with cheaper shares. It has been difficult to short stocks in China even as valuations soared because it has been virtually impossible to borrow shares.

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