BSE Sensex tanks 855 points, Nifty falls 3% amid oil turmoil
06 January 2015
It was complete bloodbath on Dalal Street on Tuesday as the Sensex crashed more than 900 points intraday (the biggest absolute fall since July 6, 2009) on fears of global slowdown post steep fall in crude oil prices and uncertainty over Greece.
This may be more of a panic selling or profit booking triggered by FIIs and domestic institutional investors, feel experts. According to them, the fall may continue for some more time due to correction in oil prices and technical factors but one should not get worried as this is the buying opportunity. The fundamentals of the Indian economy are seen improving, they say.
UR Bhatt of Dalton Capital Advisors says while the steep fall in crude prices is hurting sentiment internationally, India's macro fundamentals appear sound.
''I don't think this (correction) will last long,'' he says, unless something went dramatically wrong in the Eurozone like Greece going out of the Euro.
The 30-share BSE Sensex closed below the 27000-mark for the first time since December 17, 2014, down 854.86 points or 3.07 percent to 26987.46 while the 50-share NSE Nifty broke the 8180 support level, down 251.05 points or 3 percent to 8127.35. The broader markets crashed too with the BSE Midcap and Smallcap indices losing 2.95 percent each.
Globally, Asian markets except Shanghai closed 1-3 percent lower following weak US cues while European markets were down 0.4-1 percent (at the time of closing of Indian equities) amid widening anxieties about Europe's economy and possibility of Greece quitting the eurozone.
According to Hans Goetti, CIO at Banque Internationale Luxembourg, the risk-off trade in global markets manifests from Greek political uncertainty and fear of Fed tightening rates in mid 2015 .
The Euro hit its lowest point against the US dollar in more than 8 years, trading at just 1.19 USD/Euro. "There is some speculation that with the US markets improving, the Euro could very well hit the previous impossible rate of one euro/dollar if crude oil prices continue to weaken, says Raghu Kumar, co-founder of RKSV.
Brent crude extended losses after falling 5 percent in previous session, down 3 percent to USD 51.49 a barrel (at 16 hours IST), the lowest level in last five-and-half-year. NYMEX crude plunged below USD 50 a barrel as growth in oil supplies showed no signs of abating with output in Russia hitting a record high in 2014. NYMEX crude fell 2.72 percent to USD 48.68 a barrel.
Back home, all sectoral indices ended in red with the BSE Oil & Gas index falling more than 4 percent. Bank, Metal and Capital Goods were down more than 3 percent.
ONGC was the top loser on the Sensex, losing nearly 6 percent post fall in crude oil prices. Cairn India was down 3.5 percent.
Shares of ICICI Bank, HDFC, Reliance Industries, TCS, L&T, State Bank of India, Sesa Sterlite, Tata Steel and BHEL crashed 3-5 percent. Index heavyweights ITC, Infosys and HDFC Bank were down 1.5-2.5 percent.
Tata Motors plunged 4.4 percent after the company reported Jaguar Land Rover sales data. US sales for JLR rose 1.8 percent for December with Jaguar sales up 9 percent and Land Rover sales marginally down 0.2 percent.
Telecom stocks were in focus as the Cabinet decided on the 800, 900 and 1800 mega-hertz reserve prices. Morgan Stanley says it expects 900 Mhz auctions to happen at 4 times the 1800 Mhz 2014 price. Idea has highest risk as 92 percent of its 900 Mhz holding coming up for auction. Bharti Airtel has relatively less spectrum coming up for renewal. Bharti was down 0.8 percent and Idea fell 2 percent.
However, Hindustan Unilever was the only stock among Sensex 30 and Nifty 50 closing in green, up 1.9 percent. Deutsche Bank upgraded the stock to buy with a target price of Rs 900 per share. It is positive that HUL's market share gains in most categories and higher royalty expenses and excise duty rise not being margin dilutive will drive the stock.
The brokerage says that HUL may see a weak December quarter earnings, due to delayed onset of winter impacting sales of higher-margin seasonal products during the quarter but it should be used as a buying opportunity. The brokerage also revised earnings estimates by 5-11 percent in FY15-17.
More than 3 shares declined for every share advancing on the Bombay Stock Exchange.
Meanwhile, the HSBC India Services Business Activity Index stood at 51.1 in December -- down from 52.6 in the previous month, indicating a moderate expansion in business activity in December.
03:30 pm Market close
In one of the sharpest fall, the market has crashed 3 percent worrying over crude oil price and global uncertainty. The Sensex plunged 854.86 points or 3 percent at 26987.46 and the Nifty slumped 251.05 points or 3 percent at 8127.35. About 662 shares have advanced, 2248 shares declined, and 451 shares were unchanged.
03:20 pm Big crash
The Sensex and Nifty mark biggest absolute fall since October 24, 2008. The Sensex is below 27,000 for first time since December 18, 2014. 49 of 50 Nifty stocks in the red while JSPL and Tata Steel are top losers.
03:10 pm Market bleeds
The Sensex is down 856.79 points or 3 percent at 26985.53 and the Nifty is down 255.45 points or 3 percent at 8122.95. About 626 shares have advanced, 2254 shares declined and 458 shares were unchanged.
ONGC is down 6 percent, Sesa Sterlite, Tata Steel, Reliance and BHEL are major losers in the Sensex.
02:58pm Euro zone PMI
The euro zone economy ended 2014 with its worst quarter for over a year as further price cutting failed to significantly drive up business activity, adding pressure on the European Central Bank to act, surveys showed.
Also of concern to policymakers, the surveys highlighted an ongoing downturn in France and Italy and only a stuttering performance in Germany, Europe's largest economy.
"The weakness of the PMI in December will add to calls for more aggressive central bank stimulus, including full-scale quantitative easing, to be undertaken as soon as possible," said Chris Williamson, chief economist at survey compiler Markit.
Markit's final December Composite Purchasing Managers' Index (PMI), based on surveys of thousands of companies across the region and seen as a good indicator of growth, missed an earlier flash reading of 51.7, coming in at 51.4, reports Reuters.
02:50pm Market Check
The 30-share BSE Sensex crashed 838.08 points or 3.01 percent to 27004.24 and the 50-share NSE Nifty lost 242.75 points or 2.90 percent to 8135.65.
About 645 shares have advanced, 2152 shares declined, and 475 shares are unchanged on the Bombay Stock Exchange.
02:45pm FII View
The risk off trade in global markets manifests from Greek political uncertainity and fear of Fed tightening rates in mid 2015, says Hans Goetti, CIO at Banque Internationale Luxembourg.
Speaking to CNBC-TV18 about the correction in Indian equities, Goetti says it is part of consolidation for a market that has had a good run. But improving fundamentals make it an attractive destination for foreign investors, he says.
With crude seeing fresh lows, global sentiment were hurt resulting in sell-off in European and Asian markets today. Goetti says Saudi Arabia is determined to keep market share in an oversupply situation, which is why oil prices will stay on the lower side.The demand situation has not deteriorated much, and there would be many countries, like India, benefitting from it. Indian crude basket has fallen by USD 2.92 to USD 51.53/bbl.
02:41pm Market Update
The Sensex and Nifty marked biggest intra-day loss since September 3, 2013. All sectoral indices are in the red, falling in range of 1.2-3.3 percent while India VIX rose over 21 percent, trading at highest level since December 17.
HDFC Bank, ICICI Bank and Reliance Industries were top contributors to Nifty fall. ICICI Bank contributed over 200 points to Bank Nifty fall. ACC, GAIL, L&T and M&M were trading below 200-DMA.
Nikkei saw worst day of trade in last 10 months. Brent fell below USD 53 a barrel, the lowest level since May 2009.
02:35pm Godrej Consumer Products in focus
FMCG major Godrej Consumer Products today said it has fully acquired South Africa's hair extensions firm Frika Hair (Pty) for an undisclosed sum in order to consolidate its position in the South African market.
In a BSE filing, GCPL said "it has entered into an agreement with Frika Hair (Pty) Ltd for the acquisition of 100 percent equity stake in its hair extensions business in South Africa."
Commenting on the acquisition, GCPL Managing Director Vivek Gambhir said: "This acquisition reflects our continued commitment to scaling up our presence in Africa and providing African consumers with a wide range of superior quality products at affordable prices."
02:30pm Market Update
The Sensex declined 720.55 points or 2.59 percent to 27121.77 and the Nifty plunged 208.70 points or 2.49 percent to 8169.70.
About 727 shares have advanced, 2033 shares declined, and 482 shares are unchanged.
The total industry volume growth for the commercial vehicle (CV) industry in fiscal year 2015-16 will be better than the 10 percent expected this fiscal, believes Gopal Mahadevan, President –Finance and CFO, Ashok Leyland.
In an interview with CNBC-TV18, Mahadevan said the inventories for CV companies have gone down significantly and that he expects the fourth quarter to be better than the third quarter thanks to improving economic environment.
Ashok Leyland's volumes were up 20 percent year-on-year and it outperformed the industry, he said, adding that its market share last year increased from 24 percent to 27.1 percent.
02:00pm Market Check
Equity benchmarks remained under selling pressure, tracking uncertainty over Greece, fears of likely global slowdown post steep decline in crude oil prices. The Sensex dropped 558.13 points or 2 percent to 27284.19 and the Nifty fell 161.40 points or 1.93 percent to 8217.
Saurabh Mukherjea of Ambit Capital is not perturbed by the global sell off, saying one must buy India on every dip due to major macro positives. The brokerage sticks to the Sensex target of 30000 by March 2015 and 36000 by March 2016.
The broader markets gained 1.5 percent each. Nearly three shares declined for every share advancing on the Bombay Stock Exchange.
Shares of ONGC, Tata Motors, HDFC, Tata Steel, Tata Power, Jindal Steel and NMDC topped the selling list, down 3-4 percent whereas HUL bucked the trend, up 2 percent.
Reliance Industries, Jet Airways, State Bank of India, Tata Steel, Gujarat State Petronet, ICICI Bank, Infosys, Tata Motors and ITC were most active shares on exchanges.
The rupee painted a picture of resilience, trading stronger at 63.34 a dollar versus a close of 63.41 in previous session.
Globally, Asian markets except Shanghai closed 1-3 percent lower while European markets were mixed. Nymex crude plunged below USD 50 a barrel to the lowest level in five-and-half-year as growth in oil supplies show no signs of abating with output in Russia hitting a record high in 2014.
In a clear sign of safe haven buying, the US 10-year bond yield dipped below the psychological 2 percent mark on widening anxieties about Europe's economy and Greece possibly quitting the eurozone.
1:50 pm Bet on banks? Brokerage house Nomura sees public sector banks returning to profitability over the next two years, but sees return on equity (RoE) not matching the levels seen in the previous bull market. "Disappointments over the asset quality for PSU banks
seem to be over, and we expect a meaningful improvement in delinquency levels from FY16,'' said the Nomura note to clients.
"With PPOP (pre-provision operating profits) stabilizing, coupled with improving credit costs, we expect around 25 percent profit CAGR over FY14-17, after flat earnings for the past five years,'' the note said.
1:30 pm In focus: Shares of telecom stocks are under pressure on concerns of high price in bidding for spectrum. The Union Cabinet has approved the proposal to auction 800 MHz, 900 MHz and 1800 MHz spectrum. It has approved the reserve price for 800 MHZ spectrum at Rs3,646 crore Pan-India Per MHz and 900 MHZ spectrum at Rs 3,980 crore. The Cabinet also approved reserve price for 1,800 MHz spectrum at Rs 2,191 crore.
Idea has 92 percent of its 900 mhz holding coming up for auction hence highest risk. Bharti Airtel has relatively less spectrum coming up for renewal.
The government is aiming to rake in at least Rs.64,840 crore from the sale next month.
As per the tentative timelines drawn by the Department of Telecommunications (DoT), the last date for submission of application is February 2, and bidders will be pre-qualified by February 13. The auction will start on February 23.
Blood spills continue on Dalal Street as selling spree continues. The Sensex is down 588.39 points or 2 percent at 27253.93, and the Nifty is down 168.30 points or 2 percent at 8210.10.
About 667 shares have advanced, 1956 shares declined, and 491 shares are unchanged.
ONGC and Tata Steel are down 4 percent each, while Tata Motors, ICICI Bank and Tata Power are other losers in the Sensex. HUL is up marginally.
Gold prices firmed above USD 1,200 an ounce, as tumbling global equities and concerns over Greece's future in the euro zone prompted investors to seek safety in the metal.
Asian shares took a hit from sliding oil prices and political uncertainty in Greece. On Monday, both the Dow Jones industrial average and S&P 500 suffered their biggest one-day declines in about three months. There is increasing speculation that Greece might exit the euro zone if a left-wing party that has vowed to end austerity measures and erase a big portion of its debt wins Jan. 25 elections as widely expected.
12:50pm Coal India chairman speaks
Ramping up output and improving profitability will be the top-most priorities for state-run Coal India's new Chairman Sutirtha Bhattacharya, although he admits that the coal production target of 925 million tonnes by 2019-20 is a huge challenge.
"For any commercial business entity, what matters most is the bottom line. I intend to steer the company with a three-pronged agenda," Bhattacharya said.
"Coal India's major challenge is to meet the rising demand from the power sector. The company is doing its best to see that power utilities in the country do not suffer for want of coal," Bhattacharya told PTI in an interview.
Bhattacharya took charge as CIL chairman yesterday, a day before a five-day strike began in the coal industry.
"There is no single silver-bullet solution to the challenges, except for actively pursuing them at appropriate levels for expeditious action," he said, while adding that he will work with twin priorities of "ramping up coal production and increasing coal supplies to consumers."
12:40pm SML Isuzu in demand
SML Isuzu sold 1073 vehicles during December, 2014 against 660 vehicles sold in December, 2013.
The stock surged 8 percent to Rs 968.75 amid high volumes on the Bombay Stock Exchange.
12:30pm Apollo Hospitals Enterprises in focus
Apollo Health and Lifestyle, wholly owned subsidiary of Apollo Hospitals Enterprises, completed the acquisition of Nova Specialty Hospitals.
Apollo Hospitals says Apollo Health-Nova Speciality deal was in the range of Rs 135-145 crore.
Apollo Health and Lifestyle is currently present in the secondary care segment throught the day surgery and cradle formats. "Given the immense potential and the need for quality healthcare delivery closer to the home, this acquisition will enable Apollo Health and Lifestyle to significantly expand its' footprint and will catapult it into a leadership position in this segment of healthcare," said Sangita Reddy, Joint MD, Apollo Hospitals.
12:20pm HSBC PMI
Services sector activity in India expanded in December, but at a slower pace as firms received lesser number of new orders as compared to the previous month, a monthly HSBC survey said today.
In November, the sector had recorded fastest pace of expansion in five months.
The HSBC India Services Business Activity Index, which tracks changes in activity at Indian services companies on a month-by-month basis, stood at 51.1 in December -- down from 52.6 in the previous month, indicating a moderate expansion in business activity in December.
A score above 50 indicates that the sector is expanding, while a figure below that level means contraction, reports Reuters.
12:10pm Market Expert
Global tremors are having an impact on local markets, but fundamentals of Indian economy and earnings still remain intact, says Dipan Mehta, Member, BSE & NSE.
However, Mehta feels that markets are at good levels to enter India-focussed bluechip companies and expects private banks, NBFCs and country-centric sectors to give higher returns
He expects market to drift lower over the next week and is underweight on commodities, oil and gas companies.
12:00pm Market Check
The market is in risk-off mode as the Nifty corrected more than 150 points and the Sensex lost over 600 points intraday in a broad-based sell-off. The broader markets too saw a cut of 1.5 percent.
Weak global cues weighed on the market. Asian markets took cues from a weak close in the US last night. All of Asia except Shanghai saw deep cuts as uncertainty over Greece and lower oil prices spook equities.
The 30-share BSE Sensex fell 613.07 points or 2.20 percent to 27229.25 and the 50-share NSE Nifty shed 177.30 points or 2.12 percent to 8201.10. About three shares declined for every share advancing on the Bombay Stock Exchange.
Crude prices continued to languish at five-and-half-year lows. Brent crude traded just above the USD 53 a barrel while Nymex crude was at USD 50 per barrel. Oil stocks like ONGC and Cairn saw a cut of more than 3 percent each.
Tata Motors traded with a cut of 3.5 percent after the company reported it's JLR sales. US sales for JLR rose 1.8 percent for December with Jaguar sales up 9 percent and Land Rover sales marginally down 0.2 percent.
Telecom stocks remained in focus as the Cabinet decided on the 800, 900 and 1800 mega-hertz reserve prices. Morgan Stanley says it expects 900 mhz auctions to happen at 4 times the 1800 mhz 2014 price. Idea has highest risk as 92 percent of its 900 mhz holding coming up for auction. Bharti airtel has relatively less spectrum coming up for renewal.
ICICI Bank, HDFC and Reliance Industries are the biggest contributors to the fall, down 3 percent each. Infosys, L&T, Sun Pharma and TCS dropped 2 percent each. ITC declined over a percent while HUL, the only gainer on Sensex, gained 0.2 percent.
11:55 am Market opinion: With market extending loss in the first hour of trade, scared investors were found looking for safe havens. There is a fear that the fall, which is steepest intra-day loss since September 2013, could continue towards even lower levels, will be great opportunity to buy quality stocks, says Sanjay Dutt of Quantum Securities. Dutt says Nifty will hold on to 7800-7900 levels and investors can use the opportunity to enter into the engineering space. He also advises to pick stocks from bank and capital goods sectors.
11:30 am Buzzing: Shares of Videocon Industries gained 4.5 percent intraday as media report suggested that its subsidiary sold some stake to US company.
Satellite television operator Videocon d2h agreed to sell shares worth up to USD 375 million to US-based Silver Eagle Acquisition Corp and the proceeds will be used to expand its services.
Silver Eagle will own between 33.5 percent and 38.6 percent of Videocon d2h for USD 300 million to USD 375 million, the two firms said in a statement late on Monday. The deal will result in the listing of the Indian company in the United States.
Videocon d2h, part of the diversified Videocon Group, plans to list the American depositary shares, which will be issued to Silver Eagle, on the Nasdaq stock exchange, the companies said. Videocon d2h had earlier filed papers with the Indian market regulator for a local listing.
The market is weighed down by weak global cues. The Sensex is down 592.26 points or 2 percent at 27250.06, and the Nifty slips 172.75 points or 2 percent at 8205.65. About 557 shares have advanced, 1817 shares declined, and 487 shares are unchanged.
Tata Motors and ONGC are down 4 percent each while Tata Steel, HDFC and Sesa Sterlite slip around 3 percent each.
Asia is weak with Nikkei at three-week lows taking cue from the weak US & Europe close. Markets were spooked on political uncertainty in Greece and crude prices seeing further declines, now at 5.5-year lows. Brent is at USD 53 per barrel.
Dollar index continues to trade above 91 but is off 9 year peaks. Euro continues to hover at 9-year lows increasing prospects of more policy easing from ECB. The yen saw inflows due to safe haven buying. Rupee turned lower now but was seeing some support from some exporter selling interest along with the drop in oil prices supporting.
Telecom stocks are in focus as the cabinet decides on the 800, 900 and 1800 megahertz reserve prices. Morgan Stanley expects 900 mhz auctions to happen at 4x 1800 mhz feb 2014 price. Idea has 92 percent of its 900 mhz holding coming up for auction hence highest risk. Bharti airtel has relatively less spectrum coming up for renewal.
Following a sharp slowdown over the past two years, thanks to weak economic environment, sales of commercial vehicles have firmly bottomed out and are in revival mode, according to Vinod Aggarwal, chief executive officer of VE Commercial Vehicles.
''All segments in commercial vehicles have bottomed out,'' Aggarwal told CNBC-TV18 in an interview. ''In the last quarter, heavy-duty truck volumes grew 16 percent while buses grew 10 percent.''
VE, a 50:50 joint venture between Sweden's Volvo and India's Eicher Motors, enjoys a 32 percent market share in light motor vehicles and a 15 percent market share in buses.
10:45am Indian Crude Basket, HSBC PMI
Indian crude basket fell by USD 2.92 to USD 51.53 a barrel following sharp fall in global crude oil prices last night.
India HSBC services PMI declined to 51.1 in December compared to 52.6 in previous month while HSBC Composite PMI slipped to 52.9 versus 53.6 during the same period.
10:40am Gold Update
Gold prices firmed above USD 1,200 an ounce today, as tumbling global equities and concerns over Greece's future in the euro zone prompted investors to seek safety in the metal.
Asian shares took a hit today from sliding oil prices and political uncertainty in Greece. On Monday, both the Dow Jones industrial average and S&P 500 suffered their biggest one-day declines in about three months.
There is increasing speculation that Greece might exit the euro zone if a left-wing party that has vowed to end austerity measures and erase a big portion of its debt wins Jan. 25 elections as widely expected.
Spot gold had ticked up 0.1 percent to USD 1,205.40 an ounce by 0325 GMT, adding to the previous session's 1.3-percent gain, reports Reuters.
10:30am Jubilant Life shares in demand
Jubilant Life Sciences, an integrated pharmaceuticals and life sciences company,
received abbreviated new drug application (ANDA) final approval from the US Food and Drug Administration (US FDA) for Mycophenolate Mofetil and Rizatriptan tablets.
Mycophenolate Mofetil USP is the generic version of Cellcept (of Roche), an immunosuppressant which is used to help prevent organ rejection in transplants. The current annualized US market size for Mycophenolate Mofetil USP, 250 mg
capsules and 500 mg tablets as per IMS is USD 245 million.
Rizatriptan Tablets 5 mg and 10 mg is the generic version of Maxalt (of Merck), used for the treatment of migraine. The current annualized US market size for Rizatriptan tablets 5 mg and 10 mg as per IMS is USD 70 million.
10:20am Market Expert
It is still early days of an economic recovery, but an upturn is definitely underway, feels Saurabh Mukherjea of Ambit Capital.
In an interview to CNBC-TV18, Mukherjea said the big picture was encouraging and his firm remained ''comfortable buyers'' of the India story.
''The economy is recovering, policy making is happening in full throttle,'' he said, adding he was not too worried about the ongoing global sell off, because India's strong underlying fundamentals would help it bounceback quickly.
He expects the Budget session of Parliament to be a much more productive one than the Winter session, with 4 important ordinances likely to become law.
Mukherjea said he did not expect the government to take up land reforms so soon. By doing so, it has sent out a powerful signal to India Inc about its intention to push key reforms.
Mukherjea expects the GST Bill to be passed in at least one House of the Parliament in the Budget session.
10:10am Stocks in Action
Shares of ICICI Bank, Infosys, Tata Motors, HDFC, Reliance Industries, L&T, ONGC, Axis Bank, Wipro, Sesa Sterlite, Hero Motocorp, Dr Reddy's Labs, Tata Steel, Cipla, NTPC, Hindalco and Tata Power plunged 2-3.5 percent.
Globally, Asian markets like Shanghai, Hang Seng, Nikkei, Straits Times, Kospi and Taiwan Weighted dropped 1-3 percent. European markets too are likely to see sharp fall in opening trade.
Brent crude oil prices edged up by 0.4 percent to USD 53.32 a barrel currently after seeing a 5 percent fall in previous session while US crude rose 0.3 percent to USD 50.20 a barrel.
10:00am Market Check
Equity benchmarks as well as broader markets slipped around 2 percent each on weak global cues post sharp fall in crude oil prices last night. The 30-share BSE Sensex tanked 534.00 points to 27308.32 and the 50-share NSE Nifty lost 159.15 points to 8219.25.
More than four shares declined for every share advancing on the Bombay Stock Exchange.
Shane Lee of CIMB, said he expects the focus to be more on the bad news of oil price decline and concerns in Europe during this period of volatility.
Though Lee sees the current situation as a buying opportunity in India, he feels the emerging markets will underperform developed markets.
All sectoral indices traded in red with the BSE Auto, Capital Goods, IT, Metal, Oil & Gas, Power and Realty indices declined over 2 percent while Bank and Healthcare dropped 1.8 percent each.
9:55 am FII view: Nilesh Jasani, Jefferies says emerging market (EM) turmoil could engulf rupee and economy if RBI stays conservative.
''To break the usual "when currency is pressured, keep rates high" rule, RBI must provide thought leadership on fundamentals and importantly, show its belief by cutting rates proactively. Will they? The answer is uncertain. Worst case, Indian equities would still outperform but with a lost opportunity for the economy,'' he adds.
9:45 am 2015 bets: Brokerage house CLSA sees the Sensex at 31,500 by December and sees corporate earnings being boosted by better margins and lower cost of funds. ''Improving demand should boost pricing power, even as lower commodity costs help expand
margins. We forecast EBITDA to increase from a 10 percent CAGR in FY11-15 to 16 percent over FY15-17 as margins widen by 189 basis points for our coverage universe,'' said the CLSA note to clients. CLSA feels the market is not expensive at 15 times FY16 earnings as corporate-profitability cycle is on the brink of an upswing.
The brokerage expects domestic-orientated sectors such as banks, autos and building materials to benefit the most.
9:30 am Divestment: Government has said it has no desire to reduce its stake in public sector banks at "current valuation".
"Do not see any need to reduce stake in PSBs as of now... It is undesirable to reduce stake in PSBs at current valuation," Minister of State for Finance Jayant Sinha told a private news channel.
The Union Cabinet had recently decided to reduce the government stake in the 27 PSBs down till 52 percent as against the current red line of 56 percent. In the recently released Financial Stability Report, the Reserve Bank had flagged concerns over the compressed share prices of the state-run banks.
The need for dilution has arisen as a result of higher capital requirement for meeting the Basel-III norms by April 2019 and an overall pressure on government finances.
The market has opened with massive losses. The Sensex is at 27351, down 498 points while the Nifty is 8236, down 137 points. About 231 shares have advanced, 909 shares declined, and 478 shares are unchanged.
Oil stocks are dragging with major losers like GAIL, ONGC and Cairn India. Nymex crude dropped over 5 percent to USD 50 a barrel, while Brent crude tumbled towards USD 53 after data showed Russian oil output at post-Soviet era highs and Iraqi oil exports at near 35-year peaks.
Tata Motors, Tata Power and Hindalco are other losers in the Sensex.
Ashutosh Raina of HDFC Bank said, "The risk-off sentiment appears to have engulfed the global markets with oil prices hitting 5-year lows and political uncertainty in Greece forcing investors to move to safe havens.''
''The dollar strength continues with dollar index hitting 91.5 levels and gaining against most currencies. The USD-INR pair has been relatively rangebound in the 63-63.50/dollar range. The Rupee is likely to be in the 63-64/dollar range with suspected intervention expected to continue," he said.
Even the Asian markets have opened sharply lower on the back of weak overnight cues following relentless fall in oil prices. Nikkei has opened down to a near three-week low as trading sentiment was hit by a double whammy of declining oil prices and a stronger yen. All Asian indices are down more than a percent each.
The US stocks declined sharply, with the S&P 500 extending losses into a fourth session, as energy companies took it on the chin as oil fell to its lowest since April 2009. The CBOE volatility index rose 12 percent to 19.92.
Even the European shares have closed sharply lower as concerns over the health of the eurozone resurfaced like the political uncertainty in Greece that weighed on markets.
From precious metals space, gold prices rose to above USD 1200 an ounce following weak equities and eurozone concerns.