Sensex crashes 749 points as bears maul market; rupee hits 62/$

In one of its worst falls in two years, the 30-share benchmark crashed more than 800 points intraday after the Reserve Bank of India 's moves to tighten capital outflows and curb gold imports spooked foreign investors and failed to prop up the currency.

The market was also worried on fears of a downgrade and likely tapering of quantitative easing (QE).

The market which moved up in the previous four sessions on short-covering, cracked early on Friday as no words of comfort came from either the government or the RBI.

The BSE Sensex crashed 769.41 points or 3.97 percent to close at 18598.18 after hitting an intraday low of 18559.65.

The Nifty fell 234.45 points or 4.08 percent to finish at 5507.85, breaking the psycological 5500 level intraday in its first biggest fall (in percentage) since Sepetember 22, 2011. As many as 19 Sensex and 40 Nifty stocks were trading below their 200 DMAs.

BSE Realty, Metal, Capital Goods, Oil & Gas, Power and FMCG indices were down 4-6 percent while IT and Auto fell 2 percent.

Largecap names that were part of this capitulation include Reliance Industries (-4.6 percent), HDFC (-5.8 percent), HDFC Bank (-5 percent), ITC (-4.3 percent) and ICICI Bank (-5 percent). BHEL was the biggest loser with 10.7 percent losses.

Oil stocks which were excited after the government said it was in favour of one-time diesel hike, fell sharply on Friday. BPCL fell 4.3 percent and ONGC crashed 6 percent.

BSE Consumer Durables Index plummeted 8.4 percent, led by Titan Industries that was the worst performer in the index, falling 12 percent.

Bank Nifty crumbled under selling pressure, losing 5.7 percent. Bank of Baroda crashed 8.6 percent, Yes Bank cracked 12.3 percent, Canara Bank 10 percent and Bank of India lost 10 percent.

Axis Bank plunged 9.4 percent after MSCI deleted from its India Index.

Indian rupee touched a record low of 62 against the dollar as fears mount that Thursday's large improvement in the US weekly unemployment claims means the Federal Reserve will trim monetary stimulus next month. It was down 36 paise to 61.79 per dollar.

3:10 pm buzzer: Wockhardt shares are locked at 5 percent upper circuit at Rs 462.25 on the Bombay Stock Exchange Friday, continuing its upward journey for the fourth consecutive session.

Promoter Khorakiwala Holdings & Investments released pledge on its 6.97 crore equity shares (63.62 percent) on Wednesday. Now only 4.4 lakh shares or 0.4 percent equity of Habil F Khorakiwala is pledged.

Promoters hold 73.54 percent stake in the company as of June 2013.

The market continues to bleed profusely as investors are pulling out from equities. The Sensex loses 756.23 points or 3.90 percent at 18611.36, and the Nifty is down 233.40 points or 4.06 percent at 5508.90. About 658 shares have advanced, 1540 shares declined, and 131 shares are unchanged.

BHEL has extended loss to 10 percent, while GAIL , Strelite , ONGC and HDFC are other major losers in the Sensex. Meanwhile, Hero MotoCorp remain only gainer in the Sensex.

02:59pm Rupee and other currencies
Rupee, rupiah and ringgit fell to multi-year lows against the dollar as fears mount that Thursday's large improvement in the US weekly unemployment claims means the Federal Reserve will trim monetary stimulus next month.

The Indian rupee posted a new record low of 62 per dollar while Indonesia rupiah fell to a 4-year trough of 10,380 and Malaysia ringgit touched a fresh 3-year low of 3.2800.

02:50pm Losers, F&O cues
Bank of Baroda , Axis Bank and Jaiprakash Associates are top losers among Nifty 50 stocks, falling 8.6 percent each.

BHEL and Reliance Infrastructure crashed more than 7 percent. GAIL , HDFC , Sterlite Industries and ONGC slipped over 5 percent.

The volatility index surged over 20 percent. Aggressive call writing has seen at 5600 & 5700 strike rates & 5400 put witnessed buying interest.  Short build-up has seen in Bank Nifty and rate sensitives.

02:40pm Nifty may fall below 5500
Sanjay Sinha, founder, Citrus Advisors expects the Nifty to slide from the current levels to sub 5500 going ahead. Once quantitative easing comes to an end, money will start moving back to the developed market, he said.

Speaking to CNBC-TV18 regarding government hiking import duty on gold, he believes the import duty hike will lead to some reduction in gold demand. "We may not see the visible effect in the short-term, but once the festive season is over, there will be disincentive for the consumption of gold," he adds. Titan Industries shares tanked 11 percent.

02:30pm Rupee may hit 65/$
Brijen Puri of JPMorgan believes the Indian rupee could reach 65 against the dollar much before December. In an interview to CNBC-TV18 he said so far the government has taken serious measures to contain current account deficit (CAD) only on behalf of the rupee but nothing significant has been done to check the oil, fertiliser, coal, iron prices.

The Indian rupee touched its all-time low of 62 against the dollar on Friday. Though it recovered soon after, but market analysts are getting skeptical about the currency move.

He feels that the Reserve Bank of India (RBI) should opt for issuing sovereign bonds to stem rupee's fall.

02:18pm BSE Bankex extended losses to 5 percent followed by Realty, Oil & Gas and Metal indices with more than 4 percent loss.

Hero Motocorp remained on buyers' radar amid huge selling pressure across the board, rising 2.6 percent after MSCI increased weightage of the stock from 0.56 percent to 1.11 percent in its index.

02:00pm It is a bloodbath on Dalal Street today with the equity benchmarks falling more than 3.5 percent, weighed down across the board selling.

The Sensex lost more than 600 points and the Nifty dropped more than 200 points for the first time since September 22, 2011.

The Sensex is down 700.88 points at 18666.71 with 29 components in red, and the NSE Nifty is down 216.70 points at 5525.60 with 49 components in red. Declining shares outpaced advancing ones by 1506 to 604 on the Bombay Stock Exchange.

According to Arnab Das, Roubini Global Economics, the Indian market is experiencing the carnage due to the fear from the US quantitative easing tapering.

He believes the Indian currency would have been weaker had the RBI not intervened. The domestic currency fell 29 paise to 61.72 against the US dollar after hitting a record low of 62.

Manishi Raychaudhuri, MD of Asian Equity Strategist, HoR at BNP Paribas Securities advises adopting capital preservation strategy now. He feels the slowdown will continue for long.

According to him, number of FIIs coming out of Indian markets are more in July compared to June. He sees sensex trading in range of 18,300-20,400.

MCX India, MTNL , Gammon India , Everest Kanto , Kernex Micro , Hanung Toys and Jubilant Industries touched an all-time low.

Meanwhile, MCX gold October future gained 3.2 percent to Rs 30,129 per 10 gram and silver September future rose 5.77 percent to Rs 49,259 per kg. Crude oil August future climbed 1.5 percent to Rs 6,629 per barrel.

1:50 pm Market outlook: Sanjay Sinha, founder, Citrus Advisors expects the Nifty to slide from the current levels to sub 5500 going ahead. Once quantitative easing comes to an end, money will start moving back to the developed market, he said.

Speaking to CNBC-TV18 regarding government hiking import duty on gold, he believes the import duty hike will lead to some reduction in gold demand. "We may not see the visible effect in the short-term, but once the festive season is over, there will be disincentive for the consumption of gold," he adds.

1:45 pm alert: Nifty marks biggest percentage loss since Sep 22, 2011. India VIX at highest level since June 18, 2012.

1:40 pm Market levels: The Sensex is down 601.81 points or 3.11 percent at 18765.78 with 28 components in red, and the Nifty is down 195.70 points or 3.41 percent at 5546.60 with 49 components in red. About 642 shares have advanced, 1472 shares declined, and 120 shares are unchanged. Bank Nifty marks biggest percentage loss since July 2009. BSE cons durables hits lowest level since February 6, 2012.

Hero MotoCorp is up 3 percent in the BSE.

1:35 pm FII opinion: Arnab Das Of Roubini Global Economics believes that the capital restrictions could impact FII sentiment further at a time when most emerging markets including India will face the onslaught of tapering.

1:30 pm Buzzing: Escorts shares gained more than 7 percent intraday Friday to touch a two-year high of Rs 95.40 after ace investor Rakesh Jhunjhunwala has bought 6,21,789 equity shares on Wednesday.

Jhunjhunwala bought shares at Rs 88.23 apiece on the National Stock Exchange.

Promoters hold 41.98 percent stake in the company as of June 2013 while LIC, Swiss Finance Corporation, Fid Funds Mauritius, Goldman Sachs, Principal Trustee and Dimensional Emerging Markets hold 11.65 percent stake.

1:20 pm: BHEL loses 8 percent on the BSE. Mobius is very cautious on infrastructure and capital goods stocks especially on L&T and BHEL.

1:10 pm FII view: Mark Mobius of Templeton AMC says, "We would not exit out completely, simply because there are some good companies, that are good long-term holdings, regardless of what happens to the individual mkts. So we feel that it is necessary to be in India, but, as I said, we could put a lot more money in, if the government makes the necessary reforms to allow easier flows into the country."

The market is bleeding as rupee plays havoc once again. The Sensex is down 486.43 points at 18881.16 while the Nifty is down 158.65 points at 5583.65.

The midcap index is down close to 2 percent. In the Futures & Options space, the volatility index surges over 20 percent, aggressive call writing seen at 5600 and 5700 strike rates and 5400 put sees buying interest.  Short build-up seen in Bank Nifty & rate sensitives.

Sharp slide for the currency as well. The rupee eases in afternoon trade after hitting record low, below 61.80 against the dollar. Bonds slip on the rupee's weakness as well.

Finance Ministry sources reiterate recent RBI measures don't amount to capital control.  The government sticks to its target on the twin deficit and says the current account deficit will be fully and safely financed.

12:55pm Market Update
The BSE Sensex is down 464.57 points or 2.40 percent at 18903.02, and the NSE Nifty is down 154.65 points or 2.69 percent at 5587.65.

Indian rupee cut losses from its record low of 62 per dollar in afternoon trade to 61.58, down 15 paise compared to Wednesday's closing value of 61.43.

Escorts gained another 5 percent on top of Wednesday's 20 percent gains post strong results. Rakesh Jhunjhunwala has bought 6,21,789 equity shares at Rs 88.23 apiece Wednesday on the National Stock Exchange.

12:50pm Buzzers
Wockhardt shares gained 4.5 percent after promoter released pledge on its 6.97 crore equity shares on Wednesday. Promoter had a pledge on its 7 crore Wockhardt shares in total.

Housing Development Finance Corporation (HDFC) fell more than 4 percent on worries that an early US rollback of monetary stimulus would spark selling by foreign investors.

India's new restrictions on foreign exchange outflows and gold imports on Wednesday in a new attempt to prop up the rupee, were also seen hampering an already slowing economy, dealers said .

12:40pm Religare Capital on Market
Tirthankar Patnaik of Religare Capital Markets says that he is bullish on IT & healthcare sectors while bearish on banks.

"We are positive on Infosys , TCS & Tech Mahindra in IT space, and Sun Pharma , Lupin & Dr Reddys Labs in pharma space," Patnaik says.

He expects the Nifty will continue to trade in range of 5500-6100.

12:30pm Expert Talk
Ajay Srivastava of Dimensions Consulting says that he will not buy into banking space at this point. There is no reason to buy this market now, he adds.

"I am not ruling out another 200-250 points correction in Nifty," Srivastava says.

12:20pm Gainers & Losers
Wipro and Hero MotoCorp shares gained nearly one percent after MSCI increased weightage in its India Index.

Capital goods major BHEL topped the buying list among Sensex 30 stocks while L&T lost 4 percent.

Mark Mobius of Templeton AMC is very cautious on infrastructure and capital goods names like L&T and BHEL.

Reliance Industries , TCS, Infosys, Hindustan Unilever and ONGC shares dropped 2 percent each.

12:10pm Expert Outlook
Anu Jain of IIFL feels that the Nifty is heading to 5470 level. "No buying will emerge if Nifty breaks 5500," she adds.

Jain expects banks to continue falling further. 9200 could be breached on Bank Nifty, feels Jain.

12:00pm The market remained under pressure in noon trade with the 50-share NSE Nifty falling 2.7 percent, weighed down by across the board selling.

The Sensex is down 458.94 points at 18908.65, and the Nifty is down 154.55 points at 5587.75 while the Midcap and Smallcap indices lost 1.5-2 percent.

Declining shares outnumbered advancing ones by 1346 to 525 on the Bombay Stock Exchange.

Mark Mobius of Templeton AMC feels that the market is concerned on goverment's ability to keep money flow into Indian market. India downgrade can not be ruled out, he adds.

Bank Nifty is trading at 14-month low and it marked the biggest percentage loss since July 2009, losing 4.36 percent to 9589.50.

Axis Bank , Bank of Baroda , YES Bank and Canara Bank are the prominent losers among banks while Kotak Mahindra Bank , Punjab National Bank and IndusInd Bank dropped more than 4.5 percent.

Country's largest lenders State Bank of India , ICICI Bank and HDFC Bank lost 3-4 percent.

Meanwhile, the Indian rupee recovered from its record low of 62 against the dollar. Currently it is trading at 61.68, down 25 paise compared to Wednesday's closing value of 61.43 per dollar.

Mobius believes the rupee will continue to be under pressure.

12:00 pm Update: Calling for a reduction in the base price for the next spectrum auction, telecom companies have said higher costs may lead to rates for calls, text messages and other services rising by up to 50 percent.

"The value of spectrum should not be too high, which will inevitably result in significant increase in consumer tariffs, unsold spectrum and consequently, no revenues for the exchequer," Bharti Airtel said.

The telecom regulator had recommended an about 11-fold increase in the base price for spectrum from the amount paid by operators in 2008.

11:50 am: Anu Jain of IIFL fears that the Nifty is heading to 5470 levels. She feels that banks may continue to fall further and Bank Nifty may breach 9200.

11:40 am Opinion: Jagish Malkani, Member BSE & NSE believes that 5500 is very strong resistance point. ''I think personally today's carnage also is a bit to do with this lingering NSEL crisis. So, one crisis is leading the problems to the other,'' he says in an interview to CNBC-TV18.

11:30 am Management speaks: In a bid to reduce the import of gold, the RBI has mandated gold importers to make full payment for the shipments upfront. But Titan Industries believes it won't have difficulty in raising money as it has a strong balance sheet, although it is going to cost more. Speaking to CNBC-TV18, S Subramanian, CFO, Titan says interest fee would be impacted in a large way because now everybody has to pay upfront for gold.

Subramanian believes Titan will be able to go ahead with its expansion plans. According to him, the current supply constraints will be short term in nature.

11:20 am Losers and gainers: Most of the stocks are reeling under selling pressure with HDFC , BHEL , Maruti Suzuki, SBI and Tata Power as major losers. Wipro , Hero Motocorp and Tata Motors are on buyers' radar. MSCI increased weightage of Hero MotoCorp, Wipro and Aditya Birla Nuvo . However, it reduced weightage of Adani Enterprises , ICICI Bank and Godrej Consumer Products .

11:10 am Market outlook: Ambareesh Baliga, Edelweiss says that earlier also we had taken some support at closer to those 5,500-5,525 levels. "Even this time, we could see some decent support at those levels where we could see some amount of short covering. So I do not think at these levels, one should be exiting in panic," he adds in an interview to CNBC-TV18.

According to Baliga, foreign investors may also take a negative view and possibly turn out to a certain extent. "Because of those fears, fairly we are seeing the markets crack like this but the way things are, I don't think government had today the option than to take drastic action," he says.

The market continues to slide dragged by rate sensitives, metals and FMCG stocks. The  Sensex is down 449.03 points or 2.32 percent at 18918.56 while the Nifty slips 148.90 points to 5593.40. About 485 shares have advanced, 1151 shares declined, and 88 shares are unchanged.

Shares in Axis Bank slump 6 percent after MSCI said it would exclude the bank from its standard and large cap indexes. Axis shares also come under pressure after the Reserve Bank of India said on Wednesday overseas investors will not be allowed to purchase additional shares given the foreign shareholding limit has been breached.

In reaction to MSCI changes, M&M Financial gains 4.5 percent post addition to MSCI with a weight of 0.47 percent.

10:59am Rupee
The domestic currency dropped 12.7 percent in 2013 and 3.5 percent in past one month. It fell 41 paise to 61.84 against the US dollar.

Buzzers
Titan Industries slumped 12 percent after brokerages downgrade the stock on change in gold import norm. CLSA downgraded the stock to sell and slashed its target price to Rs 245/share from Rs 315/share.

JK Tyre shares gained 7 percent as its Q1 net profit jumped over 3 times to Rs 55.3 crore from Rs 16.4 crore (Y-o-Y).

Gitanjali Gems gained fourth consecutive session, rising 4 percent today. It had stop falling (with persistent lower circuit from June) last week.

10:55am F&O cues
There is a long unwinding in ICICI Bank and HDFC Bank while fresh shorts are added in HDFC, Axis Bank , ITC and Reliance Industries .

Nifty 5600 Call added 18.5 lakh shares in open interest and its premium declined to 87.60 while Nifty 5700 Call added 12.70 lakh shares in open interest and its premium slipped to 43.95.

10:50am Axis Bank shares crashed 8 percent post MSCI rebalancing.

MSCI removed Axis Bank from its Global Standard Indices while it added Mahindra & Mahindra Financial Services (India) in the same. M&M Financial gained 3 percent.

Wipro gained 0.8 percent after MSCI increased its weightage in the index. ICICI Bank dropped 3.6 percent and Godrej Consumer Products declined 1.5 percent after MSCI reduced weightage.

10:40am Jain Irrigation shares dropped 8 percent on poor Q1 earnings.

Jain Irrigation posted a consolidated net loss of Rs 60.3 crore in Q1 as against loss of Rs 48.7 crore in a year ago period. MD, Anil Jain said impact of weak rupee on polymer resulted in lower margins.

"We expect margins to catch up in October-March period of FY14 and margins to improve as company will pass on polymer price increase," he added.

He also expects interest cost reduction in Q4FY14. Total outstanding receivables reduced by Rs 750 crore during the quarter (Y-o-Y).

"We expect MIS growth to be over 20 percent and see FY14 revenue growth at 20 percent," Jain said.

10:25am India Volatility Index (VIX) increased 16.30 percent to  21.74 while Nifty open interest put-call ratio slipped to 1.01 from 1.06.

BSE Consumer Durables Index dropped 8 percent, led by Titan Industries that crashed 12 percent.

Highest open interest has seen in Nifty 6000 Call. Nifty 5700 Call added 12.76 lakh shares in open interest and its premium declined to 39.55 while 5600 Call added 7.45 lakh shares in open interest and its premium slipped to 80.90.

10:14am The market crashed more than 2 percent in morning trade Friday with the Nifty fall below 5600 level after the Indian rupee touched 62 level against the US dollar.

The Sensex is down 469.88 points at 18897.71, and the Nifty is down 152.55 points at 5589.75. More than 2.5 shares declined for every share advancing on the Bombay Stock Exchange.

The domestic currency extended losses today to touch a record low of 62 per dollar, down nearly 60 paise from its Wednesday's closing value of 61.43.

Every sector is under selling pressure. Realty, banks, metal, power, capital goods and oil & gas are prominent losers, falling 3-4 percent followed by FMCG and auto with 2 percent loss.

9:50 am FII view: Adrian Mowat, Chief Asian and Emerging Equity Strategist, JPMorgan advises investors to book partial profit in Indian IT stocks and exporting companies and investing in private banks on correction.

"A tactical approach would be to switch from exporters, which have outperformed substantially and one of the best sector in whole of the emerging market - Indian IT. Put some money into the private sector banks in India which have been hit hard. These are good long-term franchises" he elaborated.

He expects the Indian equity market to witness a sharp recovery rally if the rupee strengthens back towards 60/USD level in the next few days. If the slide in rupee continues, then one should brace for more selloff, he cautioned.

9:40 am Telecom update: Telecom operators, including BSNL and Bharti Airtel , owe the government Rs 30,158.05 crore as outstanding spectrum charges, including the one-time fee and usage charges, reports PTI.

As per official data, GSM players owe Rs 25,748.91 crore as spectrum charges while the outstanding dues of CDMA operators stood at Rs 4,409.14 crore. Demand notices have been issued to the operators to recover the amount.

"The demand notices have been issued after the completion of assessment," Minister of State for Communications and IT Milind Deora said in Parliament.

GSM operators owe Rs 23,177.66 crore as one-time spectrum charges and Rs 2,571.25 crore as outstanding spectrum usage charges, including penalty and interest, Deora said.

9:35 am Falling: Banking stocks are getting hammered down as Bank Nifty falls 3 percent while BSE Bankex is also weak. RBI announces a slew of measures to curb rupee volatility . The interest rate ceiling on foreign currency non resident deposits has been revised. For accounts that have a maturity period of three to five years its has been hiked to libor plus 400 basis points till November 30 this year.

Not just that non-resident rupee and forex deposits have been given an exemption from CRR and SLR from the August 24. The exemption will apply for deposits with maturity of three years.

The depreciating rupee and efforts to control it is now beginning to touch the Indian upper middle class and all of corporate India.  Companies until now could spend up to 400 percent of their networth abroad to acquire or expand.

The RBI has brought this limit down to 100 percent of net worth. Indians could spend upto 2 lakh dollars a year to finance their children's education or for any indulgence or even investment. Now they can spend on 75,000 dollars a year and they can't remit dollars to buy land abroad.

9:30 am: FMC refers NSEL case to the finance ministry. The ministry is going to check money laundering, warehouse fraud. NSEL to hand over warehouse to FCI and Central Warehousing Corporation.

9:20 am Alert: TCS has been slapped with a lawsuit by Orange County in California for making "a series of false promises and intentional misrepresentations" during the bidding process for a contract.

TCS declined to comment on the issue, citing it as a legal matter.

The issue relates to a contract for development of a tax collection and management system for Orange County in 2007-2008. TCS won the bid for the job for an amount of about USD 8 million.

The market has opened weak. The Sensex falls 115 points at 19252.11. The Nifty is down 54 points after opening above 5700.

About 133 shares have advanced, 199 shares declined, and 26 shares are unchanged.

Titan Industries slumps 12 percent as it faces three major downgrades in last 24 hours on the back of gold import duty hike. The government increased import duty on gold, silver and platinum to 10 percent with a view to arrest the declining value of rupee and contain the fiscal deficit to 3.7 percent of the GDP.

The government has also raised the duty on gold ore/ concentrates/dore bars and silver dore bars ranging from 7 percent to 10 percent.

The Indian rupee opened marginally higher at 61.35 per dollar versus 61.43 yesterday.

Himanshu Arora, Religare said, "The rupee may weaken further as inflation surged to 5.79 percent. Sustained dollar demand from importers, especially oil firms may underpin the dollar against the rupee. The currency may range between 61.28-61.70/USD."

The euro rose back to 1.33 to the dollar. The dollar index slipped to 81.15 levels. The dollar yen was around 97.

Markets finished near their session lows on Thursday, with the Dow dropping more than 200 points, as bond yields jumped to their highest level in two years and as the market continued to gauge when the Federal Reserve might start to reduce its asset purchases. The CBOE volatility index shot near 15.

The 10-year treasury yield jumped to 2.82 percent, its highest level in two years, before pulling back to 2.75 percent.

Brent crude was hovering around USD 109 per barrel. Meanwhile Nymex traded around 107. From precious metals space, gold is trading at two-month highs.