Sensex crashes 449; rupee slide, Q1 nos spook investors

Stocks were hammered yet again Tuesday as a lethal cocktail of sliding rupee, worsening economic data and dismal quarterly corporate earnings, had investors fleeing.

The rupee hit a fresh record low of 61.80 to the dollar, as the RBI's efforts to boost the currency is having little effect in a face of a strengthening dollar.

The Sensex closed at 18733.04, down 449.22 points over its previous close and the Nifty closed at 5542.25, down 143.15 points over the previous close.

A weak dollar spells trouble for importers as well as companies with huge foreign foreign debt on their books.

''The market is concerned about the fact that the Fed is clearly shifting towards a more aggressive monetary policy on one side,'' said Patrick Legland of Societe Generale in an interview to CNBC-TV18.

''We are just at the very beginning of money being pulled out from EMs and possibly India. If the investors do not see reforms being able to restructure the economy there is a risk of further downside on the rupee,'' he  said.

With the rupee failing to respond to the recent RBI moves, market players are worried that the central bank and government may come out with more drastic measures to protect the rupee. And that could spell more bad news for the stock market and the economy.

In the last couple of months, FIIs have pulled out nearly Rs 17,000 crore from the stock market and around Rs 44,000 crore from the debt market. Also, many brokerages and rating agencies have trimmed their GDP  growth forecast for the current fiscal, with some even expecting it to fall below 5 percent.

Morgan Stanley chief economist Chetan Ahya said the pressure on the rupee would continue due to high consumer inflation, wide current account deficit and a strong US dollar.

''We don't think CPI inflation will come down to 7 percent soon in the next six months and at the same time we don't expect the CAD to go down to 2.5 percent,'' he said in an interview to CNBC-TV18 today.

BHEL , BPCL , OIL India, Yes Bank , Asian Paints , JP Power, and ING Vysya Bank were among the prominent losers, shedding between 7-14 percent.

Tata Power shares crashed 15 percent after reporting a loss of Rs 115 crore in June quarter as against profit of Rs 146 crore in a year ago period on higher interest payment and forex loss.

Shares of Financial Technologies , the promoter of National Spot Exchange, and group company MCX , continued to nosedive. FT founder Jignesh Shah has said that all outstanding trades on the NSEL will be settled  over the next five months.

Financial Technologies fell around 20 percent and trading in MCX was frozen at the lower end of the 10 percent intra-day circuit filter after there were no buyers.

Banking, metal, realty and oil & gas shares were the worst performers, while shares from the IT and auto sectors fared better in comparison, falling to a lesser extent.

3:50 pm Losers and gainers: Tata Power (down 15 percent) was the biggest loser in the Sensex while BHEL , HDFC , Strelite Industries and Tata Steel dargged. Tata Motors , Wipro and TCS were outperformers as  technology stocks gained on rupee slide.

BSE Bankex and Bank Nifty down 4 percent each lost the most during the day.

3:45 pm Market closing: The rupee at record low sends shivers down the equity markets. The Sensex slipped 449.22 points or 2.34 percent to ended at 18733.04 while the Nifty closed at 5542.25, down 143.15 points.

The rupee continued to tumble breaching the 61 per dollar mark again, and hitting record lows. The Indian currency is now hovering near the 61.50 per dollar mark.

In a reply in the Rajya Sabha, the finance minister today said that the government is closely monitoring external developments leading to the rupee's depreciation.

3:40 pm: Raghuram Rajan, the country's chief economic advisor, will take over the mantle of governorship of RBI from D Subbarao, who will retire in September this year.

3:30 pm Management speaks: JSW Steel , which operates a 10 million tonne steel plant at Karnataka is planning to hike steel product prices by 3-3.5 percent in current month following rupee depreciation, hike in  international steel and iron ore prices, Seshagiri Rao, joint MD & Group CFO, JSW Steel told CNBC-TV18.

Market was disappointed with the increase in the company's debt level at the end of June quarter. It reported net debt of Rs 29,200 crore. Rao explained that expenses and rupee depreciation had pushed up overall  debt.  JSW Steel's foreign currency debt currently stands at Rs 12,000 crore and rapidly depreciating rupee, which today hit lifetime low of 61.59 against dollar is going to create further trouble for the company.

3:25 pm FII view: Patrick Legland of Societe Generale told CNBC-TV18 that currently global investors are rebalancing their EM portfolios, with most of them taking money out from the region and redirecting it into either  Europe or US.

He believes that India is just at the very beginning of money being pulled. "The rupee is falling and frankly if the investors do not see reforms being able to restructure the economy there is a risk of further downside on  the rupee and maybe on the Indian market as well," he said.

The carnage in Dalal Street continues as blood spills all around. The Sensex is almost  breathless with  a loss of 443.42 points at 18738.84 while the Nifty slips 140.25 points at 5545.15. About 567 shares have  advanced, 1594 shares declined, and 127 shares are unchanged.

Both midcap and smallcap stocks are beaten out of shape as most stocks dragged.

BSE Realty Index lost 4.7 percent while Metal, Power, Capital Goods and Oil & Gas tumbled 3-3.75 percent. Defensives -FMCG Index dropped 2 percent.

Tata Power shares crashed 17 percent after reporting a loss of Rs 115 crore in April-June quarter as against profit of Rs 145.9 crore in a year ago period on higher interest cost and forex woes. More than 15 lakh  shares added on short side.

BPCL and Asian Paints dropped more than 7 percent. BHEL , HDFC, Sterlite Industries and Bharti Airtel crashed over 7 percent.

Tata Motors gained 0.9 percent while TCS and Hero MotoCorp are marginally up.

BSE Realty Index lost 4.7 percent while Metal, Power, Capital Goods and Oil & Gas tumbled 3-3.75 percent.

Defensives - FMCG Index dropped 2 percent.

BPCL and Asian Paints dropped more than 7 percent. BHEL , HDFC, Sterlite Industries and Bharti Airtel crashed over 7 percent.

Tata Motors gained 0.9 percent while TCS and Hero MotoCorp are marginally up.

02:40pm Equity benchmarks slumped more than 2 percent in afternoon trade following weakness domestic currency and cut down of GDP growth forecast by brokerages.

The BSE Sensex is down 484.33 points or 2.52 percent at 18697.93, and the Nifty is down 152.50 points or 2.68 percent at 5532.90, weighed down by banks, oil & gas, metals, capital goods and power stocks.

The BSE Midcap Index dropped 2.7 percent and Smallcap fell 1.7 percent as about three shares declined for every share advancing on the Bombay Stock Exchange..

Tata Power shares crashed 17 percent after reporting a loss of Rs 115 crore in April-June quarter as against profit of Rs 145.9 crore in a year ago period on higher interest cost and forex woes. More than 15 lakh  shares added on short side.

Bank Nifty crashed more than 400 points or 4 percent to 9673 today. Country's largest private sector lenders ICICI Bank and HDFC Bank lost 4 percent each while their rival State Bank of India declined 2.6 percent.

Indian rupee depreciated by 77 paise to 61.65 against the US dollar

1:55 pm SEBI scanner: As an estimated Rs 6,000-crore payment crisis continues to engulf NSEL, some stock brokers and portfolio managers have come under regulatory scanner for inducing HNIs and other investors  to trade on spot market commodity exchange with promise of high returns.

They are also being probed by Sebi for possible diversion of funds from equity and derivative portfolios for trading on National Spot Exchange Ltd (NSEL) through their own proprietary accounts or client accounts,  sources said.

Sebi has received complaints that these brokers were offering returns of up to 15 per cent to their clients, by asking them to place one-day buy orders for various commodities on NSEL platform, followed by immediate  sell orders to be executed in next few days.

1:45 pm Earnings: Tata Power posted consolidated net loss of Rs 114.7 crore in first quarter (April-June) as against profit of Rs 145.9 crore in a year ago period, dented by higher finance cost and forex loss, but its  standalone performance was quite good.

Consolidated net revenue increased higher-than-expected 29 percent on yearly basis to Rs 9,292 crore during June quarter while earnings before interest, tax, depreciation & amortisation (EBITDA) margin jumped 290  bps year-on-year to 21.7 percent as against analysts' forecast of 21.2 percent.

The stock is down 7 percent on the BSE.

1:40 pm Exclusive: CNBC-TV18 sources indicate that GMR Infra is in talks to divest stake in 4 toll road assets for Rs 1500-2000 crore. Khazanah likely to emerge as front runner to pick stake in GMR's four road  assets. The company is also in talks to sell stake in its Turkish airport. Gmr has told CNBC-TV 18 that as a company policy, they do not comment on speculative news. The stock, however, is down 8 percent on the  BSE.

1:30 pm Rupee: The Reserve Bank of India likely sold dollars via state-run banks, helping the rupee recover from a record low, three traders told Reuters on Tuesday.

One trader said the central bank started selling dollars around 61.78 levels, though he said the sales were not strong.

1:20 pm Macro outlook: Chetan Ahya, Asia Pacific Economist, Morgan Stanley does not see the consumer price inflation (CPI) coming down below 7 percent in the next six months despite government taking control  of food prices, which is the prime indicator for the CPI index.

Speaking to CNBC-TV18 about the falling rupee, he says the currency depreciation pressure will continue due to high CPI, wide current account deficit and rallying US dollar.

Meanwhile, Ahya believes if the GDP growth for the next two quarters is 5 or sub 5 percent then the risk of another year of sub-5 percent growth increases significantly.

The market is getting battered by the bears in today's trade as Nifty is hovering around 5600. The Nifty slips 90.20 points at 5595.20 while the Sensex is down 260.39 points at 18921.87, About 544 shares have  advanced, 1491 shares declined, and 153 shares are unchanged.

Midcap stocks are bleeding with a lose of 2 percent from previous close.

Crompton Greaves makes a U-turn after a 7 percent downtick earlier. Improvement in domestic business performance has got the street excited. However, its international business remains a worry.

Meanwhile talking about the rupee's decline, Arvind Narayanan of DBS says the RBI is not going to really intervene at specific spot levels, probably it will try and temper the volatility. ''One thing which comes to mind  now is I remember the statement which they made the last time that if dollar-rupee crosses 61-62 they had mentioned a possibilty of a rate hike. I mean a repo hike or a CRR hike is definitely a possibility now plus  liquidity conditions are very tepid and hence a rate hike definitely looks a possibilty. So I would look out for some signs on that side,'' he said in an interview to CNBC-TV18.

Supreme Infrastructure shares rallied more than 4 percent on receiving orders worth Rs 1,111.9 crore.

GMR Infrastructure may sell four toll road assets for Rs 1,500-2,000 crore and Khazanah is likely front-runner for the road asset sale, reports CNBC-TV18 quoting sources. It is learnt that GMR is also in talks to sell  stake in Turkish Airport. The stock crashed more than 7 percent.

Bajaj Electricals shares dropped 4 percent after it reported first quarter net profit of just Rs 0.66 crore in April-June quarter as against Rs 12 crore in a year ago period.

Shares of private sector lender Karur Vysya Bank lost 4.5 percent after the bank reported a dismal performance during the first quarter (April-June). Net profit fell 17.5 percent year-on-year to Rs 120.3 crore on sharp  jump in provisions despite strong income from its treasury operations.

However, net interest income (NII) grew by 30.3 percent on yearly basis to Rs 331.8 crore on good growth in treasury, corporate and retail operations.

12:30pm The market extended losses further in noon trade with the Nifty falling below the 5600 level, weighed down by financials, capital goods, oil & gas and metals stocks after sharp fall in rupee.

The BSE Sensex is down 253.92 points or 1.32 percent at 18928.34, and the NSE Nifty is down 90.05 points or 1.58 percent at 5595.35. About 522 shares advanced while 1399 shares declined on the BSE.

Indian rupee dropped 82 paise or 1.35 percent to touch an all-time low of 61.70 against the US dollar. Finance Minister P Chidambaram says that the rupee fall is due to global & domestic factors, and high current  account deficit.

Uptrend in US yields has led to outflow, impacting rupee, FM adds.

Bonds fell sharply after the rupee touched a new low. Dealers now expect the Reserve Bank of India may move to hike the repo rate.

After Monday's dismal service sector data, CLSA has cut India's FY14 GDP growth forecast to 5.2 percent from 5.5 percent. The brokerage expects growth to be sub-6 percent for 3 straight years.

Religare too has slashed their FY14 GDP growth forecast to 4.5 percent while Chetan Ahya of Morgan Stanley told CNBC-TV18 that GDP will be under 5 percent for the June quarter.

Crompton Greaves reversed its losses after a 7 percent downtick earlier, rising 0.4 percent. It's the domestic business performance led by improvement in the consumer & industrial product segment which has got the  street excited. However, its international business remained a worry.

12:00 pm: Expert take on NSEL mess: G Chandrashekar, Commodity Editor, Business Line feels that the  government took long to notice illegal trades on the National Spot Exchange (NSEL).

On July 31, the NSEL suspended trade in all contracts except 'e-series' following the government's direction not to launch new contracts because of violation of some rules.

There is a suspicion that NSEL may have lower than Rs 6,000 crore stock in its warehouse, Chandrashekar told CNBC-TV18 in an interview. He urges the government to institute an independent agency to verify the  stocks.

"If stocks as per books are available physically in the warehouses that will improve the confidence levels of market participants and that is a very critical issue," he added.

11:50 am Alert: Rupee hits fresh low at 61.59 per dollar.

11:50 Big deal! Siemens wins order worth Rs 184 crore for Gurgaon metro project. The stock is up 3 percent on the BSE.

11:45 am Earnings: Mumbai-based transformer and switchgear products manufacturer Crompton Greaves' first quarter (April-June) consolidated net profit dropped higher-than-expected 30 percent year-on-year to Rs 60  crore on lower profits in power segment.

Consolidated net sales rose 12.3 percent on yearly basis to Rs 3,157 crore during the quarter, which was above analysts' forecast.

Meanwhile, its consumer products and industrial systems divisions performed well during the quarter gone by. EBIT of consumer products rose to Rs 93.98 crore from Rs 85.03 crore and industrial systems' EBIT  increased from Rs 36.47 crore to Rs 38.57 crore.

Other income jumped 90 percent Y-o-Y to Rs 35.32 crore while finance cost climbed to Rs 20.14 crore from Rs 9.89 crore during the same period. The stock recovered from the day's low and is up 2 percent on the  BSE.

11:40 am Opinion: Service sector, which contributes 60 percent to Indian economy has turned sluggish, which indicates that growth environment has deteriorated significantly, says Nilesh Shah, MD & CEO, Envision  Capital .

''It was more like the last nail in the coffin in the sense the services sector was so far was growing at above GDP,,'' he told CNBC-TV18 in an interview. The HSBC Services Purchasing Managers' Index (PMI) contracted  for the first time in 20 months to 47.9 points in July from 51.7 points in the previous month. CNBC-TV18's managing editor Udayan Mukherjee also feels that poor service sector growth data is an alarming bell and could  lead to GDP downgrade going ahead.

11:30 am: Rupee outlook: Underlying US dollar demand from importers will take the already weak Indian rupee towards 61.70-61.80 levels, predicts Arvind Narayanan, Head of Sales , Treasury & Markets, DBS. Rupee  breached previous low of 61.21/USD in early trade on Tuesday.

The Reserve Bank of India (RBI) which recently announced a slew of liquidity measures to protect the rupee may at last resort to hiking rates if rupee hits the 62 mark, he added.

Samsung Vs Apple: Obama administration overturns ban on iPad, iPhone models

Rupee is playing havoc in the market dragging the benchmark indices. The Sensex is still below 19,000 and is at 18983.95, down 198.31 points and the Nifty slips 70.45 points to 5614.95.

About 496 shares have advanced, 1254 shares declined, and 123 shares are unchanged.

Housing Development and Infrastructure ( HDIL ) shares plunged nearly 15 percent in morning trade to touch a record low of Rs 26.10 Tuesday on interest payment default.

Indiabulls Financial Services (New name - Indiabulls Housing Finance after merger) has alleged that the promoters of HDIL, Rakesh and Sarang Wadhawan have defaulted on their interest payments, reports  CNBC-TV18.

Asian markets are weak on speculation that the Fed will soon be able to reduce economic stimulus, Nikkei is down over a 1 percent for the second day in a row, Hang Seng has lost over a 1.5 percent.

In currencies, dollar index at 81.8, euro at 1.326 and yen now sub 98 at 97.96. In commodities, Brent holds above USD 108, Nymex above USD 106. Gold slips below USD 1300.

Housing Development and Infrastructure ( HDIL ) shares plunged nearly 15 percent in morning trade to touch a record low of Rs 26.10 Tuesday on interest payment default. The stock fell 8 percent now.

Crompton Greaves dropped nearly 6 percent ahead of its earnings today. Analysts expect some more margin contraction during April-June quarter while revenue is expected to grow by 9.5 percent Y-o-Y to Rs 3,074  crore. Margins may dip to 4.8 percent versus 5.9 percent earlier and profit after tax may drop by 19 percent to Rs 69 crore.

Educomp Solutions slipped another 5 percent on top of previous day's 5 percent fall. The company has not paid salaries to over 6000 staffers for over 3 months, reports CNBC-TV18 quoting sources.

Aptech lost over 1 percent after reporting very weak earnings in first quarter. Total income declined 12.5 percent Q-o-Q to Rs 43 crore while margins dipped to 10 percent versus 20 percent earlier and profits have  dropped 70 percent to Rs 4.7 crore.

Banks are under pressure on fears that the Reserve Bank of India may consider more measures to curb rupee depreciation. HDFC Bank lost 3.3 percent while ICICI Bank and State Bank of India declined 1-1.7 percent.

Capital goods majors BHEL and Larsen & Toubro lost around 2 percent.

Sterlite Industries topped the selling list, losing nearly 5 percent while Tata Steel slipped 3 percent.

Tata Power shares fell 3 percent and Crompton Greaves tanked 6 percent ahead of first quarter earnings today.

TCS and Wipro outperformed with 0.5 percent and 1.9 percent gains. Hero Motocorp rose 1.6 percent and Tata Motors rose 0.4 percent.

10:20am Equity benchmarks fell more than one percent in morning trade Tuesday with the Sensex trading below the 19000 level and the Nifty is moving towards the 5600, weighed down by sharp drop in Indian rupee.

The BSE Sensex is down 210.05 points at 18972.21, and the NSE Nifty is down 73.70 points at 5611.70, but the cuts are deeper in midcaps.

The domestic currency depreciated by 59 paise to trade near record low of 61.47 against the US dollar.

DBS says that the underlying demand for the dollar is quite strong. Also, there is a possibility of a rate hike either in the form of repo or CRR due to pressure on the rupee, he adds. "We do not rule out the rupee at 62  to the dollar."

Financial Technologies (FTIL) plunged 15 percent after sources say that the government has decided to ban the e-series contract trading on National Spot Exchange (promoted by FTIL), the only contracts that are  currently being traded on the platform.

Declining shares outnumbered advancing ones by 981 to 353 on the BSE.

9:52 am Rupee: Rupee breaks previous low of 61.21/dollar and is record low of 61.42 per dollar. The benchmark 10-year bond yield was trading up 4 basis points at 8.24 percent.

9:50 am Earnings poll: Crompton Greaves will announce its first quarter (April-June) earnings today. Analysts on an average expect consolidated profit after tax of the company to fall by 19.3 percent year-on-year to Rs  69 crore, according to a CNBC-TV18 poll.

The drop in profit may be on account of lower losses from subsidiaries. Some analysts believe Crompton's turnaround story will play out during April-June quarter while some still believe strain in profitability witnessed  in FY12 / FY13 is likely to persist at least in the near-to-mid term.

The stock is down around 6 percent on the BSE.

9:45 am Market outlook:  The RBI's liquidity tightening measures impacted cost of funds for banks and it cannot walk away from increased interest rate now despite the fact that the rupee did not strengthen, says  Arvind Sanger of Geosphere Capital Management. He says the economy will feel the pain of the increased rates and the only sectors that are holding the markets right now are the consumer sector, IT and pharma.

The only positive factor for the Indian economy has been the good monsoons. But even increased rural demand won't be sufficient to carry the entire economy and hence a 5 percent GDP growth looks rather  optimistic, Sanger told CNBC-TV18.

9:35 am Free fall! HDIL slumps around 10 percent as Wadhawan and Rakesh Wadhawan have been named defaulters by Indiabulls Financial Services. According to Indiabulls, HDIL promoters have failed to pay interest  on a personal loan.

9:25 am Loser again: Financial Technologies shares fell around 24 percent on the NSEL mess. Sources indicate that the government has decided to bar e-series contract trading on National Spot Exchange. The bar  applies to gold, silver, zinc, lead, nickel & platinum. Meanwhile the Forward Markets Commission (FMC) tells NSEL to settle dues to small investors on priority.

9:20 am Macro outlook: CLSA cuts FY14 GDP growth forecast to 5.2 percent from 5.5 percent. It has also reduced FY15 GDP growth forecast to 5.9 percent from 6.5 percent.

The market has opened on weak note as the Sensex falls 82.49 points to19099.77 while the Nifty is down 26.95 points at 5658.45. About 148 shares have advanced, 336 shares declined, and 32 shares are  unchanged.

The Indian rupee opened weak by 17 paise at 61.05 per dollar versus 60.88 yesterday.

Jayesh Mehta, Bank of America said, "The rupee is likely to open weak on a slightly stronger dollar. However, reduction in month-end dollar demand could help the rupee to appreciate. The range for the day is seen  between 60.05-60.65/USD."

The euro holds above 1.32 to the dollar. The dollar index slipped to sub 82 levels. The dollar-yen was around 97.

Meanwhile, in earnings to watch today- Crompton Greaves' April-June topline is expected to come in steady with a 9 percent growth due to their decent orderbook. Also profitability for the company will depend on  overseas operations turnaround, mix of products and projects. Also watch out for Tata Power and Unitech that will report first quarter numbers today.

Among the global market, it was a flat close for US as investors look for further catalysts.

On the economic front, the pace of growth in the US services sector accelerated in July, picking up from a three-year low. The institute for supply management's services index rose to 56 from 52.2 in June.

In stock specific action, Apple gained to a four-month high after the Obama administration overturned an international trade ruling that said some sales of older iPhones and iPads should be banned because they  infringed a Samsung electronics patent. The iPhone maker's stock was up more than 20 percent from its 52-week low of USD 385 in April.

Asian markets were trading weak. China's Shanghai Composite slipped 0.35 percent or 7.11 points at 2,043.37. Japan's Nikkei shed 1.03 percent or 147.06 points at 14,110.98. Straits Times was down 0.59 percent or  19.15 points at 3,222.64. South Korea's Seoul Composite shed 0.81 percent or 15.47 points at 1,900.75.

In the currency space, the euro holds above 1.32 to the dollar. The dollar index slips to sub 82 levels. The dollar-yen is around 97.

In commodities, Brent crude hovers around USD 108 per barrel.  From precious metals space, gold trades around USD 1300 an ounce.