Tuesday, the Indian market is trading sharply lower on fears that a higher fiscal deficit may result in rating agencies downgrading India, which in turn could lead to foreign fund outflows. Weakness in the other Asian markets is also weighing on investor sentiment.
The key indexes are now trading at their day's lows. The BSE Sensex is trading at 9,108, down 197 points or 2.11% and the S&P CNX Nifty is trading at 2,788, down 2.12%.
Second-line stocks are also coming under significant selling pressure.
DLF, Mahindra & Mahindra, ICICI Bank, Tata Steel, Reliance Infrastructure, State Bank of India and Maruti Suzuki are trading deep in the red. Twenty-nine out of 30 Sensex stocks are trading in negative territory, while Ranbaxy Laboratories is bucking the declining trend, gaining 1.68%.
On the BSE, the market breadth is extremely negative, with 1000 decliners compared to 407 stocks that are advancing. Stocks across the sectors are coming under selling pressure.
Realty stocks are the worst hit, as the interim budget did not announce any sops to the housing sector. Among the major losers in this space, DLF is losing 5.64%, Ansal Infra is declining 4.89% and Unitech is down 4.81%.
Among banking stocks, ICICI Bank is drifting down 3.59%, State Bank of India is moving down 2.66%, Union Bank of India is losing 2.30% and Axis Bank is down 2.20% on concerns that anticipated treasury profits may not materialize due to higher government borrowings.
Dena Bank, Oriental Bank of Commerce and Andhra Bank are also trading lower even as these banks are expected to benefit from a capital infusion plan by the government. Steel and cement stocks are also falling in line with the weakness in the broader market despite the government increasing fund allocation to the rural infrastructure scheme Bharat Nirman.
In the IT space, Financial Technologies is losing 3.92%, TCS is down 2.29%, Wipro is declining 1.58%, Infosys is down 1.27% and HCL Technologies is losing around 0.8% after the interim budget did not announce any specific measures to help the industry.
India's IT industry is facing an unprecedented crisis and it's difficult to forecast as to how long the current global economic downturn would last, Infosys Technologies Co-Chairman Nandan M Nilekani said on Monday.
Reliance Communication is down 2.07% and Reliance Infrastructure is losing a little over 3% after the companies disclosed information about pledging of shares by their promoters to the stock exchanges.
