Sensex plunges 242 points, Nifty at 8300; HUL, Hindalco up 1%
21 August 2015
03:30 pm Market closing: After a heavy selling day, the market ended with severe losses. The Sensex is down 241.75 points or 0.9 percent at 27366.07 and the Nifty is down 72.80 points or 0.9 percent at 8299.95. About 1014 shares have advanced, 1791 shares declined, and 96 shares are unchanged.
Bajaj Auto, Vedanta, GAIL, Tata Motors, Hero MotoCorp were top losers in the Sensex. Among the gainers were Hindalco, HUL, Cipla, Infosys and Wipro.
02:55 pm Nifty above 8300: Equity benchmarks halved losses in last hour of trade. The Sensex declined 232.04 points to 27375.78 and the Nifty fell 67.35 points or 0.80 percent to 8305.40.
About 821 shares have advanced, 1890 shares declined, and 95 shares are unchanged on the BSE.
02:40 pm Buzzing: Sadbhav Engineering said its subsidiary Sadbhav Infra has filed draft red herring prospectus with capital market regulator for Rs 425 crore initial public offering.
The stock gained more than 3 percent.
02:20 pm Govt notifies norms for NMET: The government has notified the setting up of National Mineral Exploration Trust (NMET), which will look into the ways to encourage exploration of mines and minerals in the country. The trust will be headed by the minister of mines. At present, mining exploration work is undertaken mainly by GSI, Mineral Exploration Corporation (MECL), Atomic Mineral Directorate of Exploration, Department of Atomic Energy and State Directorates of Mining.
The government has decided to include more entities in the exploration work such as NMDC, SAIL and MOIL, a move that will help India tap potential in this area more efficiently. The objective of NMET is to use the funds accrued to the Trust for the purposes of regional and detailed exploration in such manner prescribed by the Central Government. As per the NMET norms, the trust will have a governing council as its apex body that will have the Mines Minister as the Chairman.
02:00 pm Market Check
The market has maintained its southward journey in afternoon trade as the Sensex slipped 316.25 points or 1.15 percent to 27291.57 and the Nifty dropped 99.30 points or 1.19 percent to 8273.45, dragged by banking & financials, capital goods and auto stocks.
The BSE Midcap and Smallcap indices, too, declined over a percent. Nearly three stocks fell for every one which rose, underscoring the bearish mood in the broader market.
HUL, Sun Pharma and Infosys were the top gainers in Sensex. Among the losers were ITC, Wipro, TCS and Coal India.
The rupee remained weak, trading at 65.88 to the dollar, up 0.34 paise over its previous close.
In commodities, Brent crude declined 0.36 percent to USD 46.45/barrel and Nymex crude slipped 0.5 percent to USD 41.13/barrel, though they showed some recovery from day's low.
12:55 pm Banks weakness: With both the PSU banks and private banks under immense pressure in trade today, Vaibhav Agrawal, VP Research Banking, Angel Broking believes it could be due to worries of the rupee depreciating further.
Apart from the currency worry, PSU banks are also bogged down by asset quality pain. Going forward, he sees more pressure for the steel sector and with PSU banks having around 7-9 percent exposure to these stressed assets they would continue to remain under pressure.
12:35 pm Global Update: China's Shanghai Composite closed at 3,507.74, down 4.3 percent today. The index crashed 11.5 percent for the week.
European markets have opened weak following steep fall in Asian and US indices. France's CAC plunged 1.5 percent and Britain's FTSE fell 1.2 percent. Germany's DAX declined 1.7 percent.
12:25 pm Interview: Speaking on the competition payments banks may give to normal banks, Shyam Srinivasan MD & CEO at Federal Bank said focus on scalability and visibility going forward is necessary although there is no reason to feel threatened. He admits payment banks are likely to change dynamics of banking.
Meanwhile, he is very excited about the launch of selfie-account, which would be a convenient method for banking and urges customers to avail the facility.
Talking about the bank's e-credit facility, he said it meant for the existing customers and audiences so far have been captive. But going forward, the bank plans to open it to new-to-bank customers through online capability for wider base.
With regards to stress accounts, he said currently there are no issues The one which was under stress has already been recognised, he said.
12:00 pm Market Check
Equity benchmarks erased 2015 gains as global jitters dragged the market. The Sensex tanked 395.23 points or 1.43 percent to 27212.59 and the Nifty dropped 120.10 points or 1.43 percent to 8252.65. About 583 shares have advanced against 1861 shares declined on the Bombay Stock Exchange.
Pressure on banks continued as the Bank Nifty saw a cut of more than 2 percent. The PSU Bank Index also saw a cut of 3 percent as Morgan Stanley said it's time to sell state-owned banks. It is underweight on all PSU banks except Bank of Baroda where it expects a potential balance sheet clean-up given the new management.
HDFC, Larsen & Toubro, HDFC Bank, ICICI Bank, Reliance Industries, Tata Motors, SBI, Bajaj Auto, Vedanta and Hero Motocorp were down 1.5-4 percent.
However, HUL rebounded with more than half a percent gain. Infosys rose nearly 1 percent in an otherwise weak market as the sharp fall in rupee and the launch of three new service offerings yesterday helped the stock outperform market.
The rupee weakened further, threatening to breach 66 against the greenback. The currency hit a fresh 2-year low of 65.82 a dollar (down 32 paise against dollar), depreciating in-line with global emerging market currencies.
It's a sea of red across Asian markets tracking weak cues from the US market and volatility in China after the manufacturing PMI slumped to a six-and-a-half-year low. Europe, too, is expected to plummet at the open as a new election in Greece spooked traders.
11:50 am PSU Banks fall: Shares of PSU banks continue to fall dragging the Bank Nifty sharply on Friday. Morgan Stanley is underweight on all public sector banks except Bank of Baroda and says this is an opportunity to sell. The brokerage sees a 30 percent downside as it thinks other PSU banks (except BoB) face sustained low profitability and weak balance sheets.
Morgan Stanley warns that commodity price declines will hurt asset quality materially as PSU banks have fairly high exposure to this area and hence earnings per share (EPS) revisions may continue to be downward and stocks should remain weak.
Unimpressed by Indradhanush, government's seven-pronged strategy for bank's survival, Morgan Stanley thinks it is not enough for the banks to make proper provisions and start growing.
11:30 am Rupee outlook: Nowithstanding the rupee's relative outperformance, the slide will conitnue a bit more in tandom with its emerging market peers, says Ju Wang of HSBC. She forecasts year end target for rupee at 66 per dollar and can go all the way down to 67 per dollar next year.
"We do not think China has joined the currency per se, but the fact that it is now allowing the market force to play a bigger role in deciding the currency's move definitely has removed hindrances to the currency for the Asian foreign exchange stabilities including emerging markets stabilities. So, that is why markets react very negatively towards emerging markets in general now," she adds.
The market continues to bleed with the Nifty below 8250. The 50-share index is down 120.70 points or 1.4 percent at 8252.05. The Sensex is down 398.86 points or 1.4 percent at 27208.96. About 436 shares have advanced, 1789 shares declined, and 65 shares are unchanged.
Midcaps see sharp losses with the likes of Mastek, Motherson Sumi, Central Bank seeing pressure. Vedanta, Tata Motors, Hero MotoCorp, GAIL and SBI are among major losers while Infosys, Sun Pharma, Lupin, TCS and HUL are top gainers.
Rupee falls further testing 66 levels. Oil is headed for its eighth straight weekly decline in Asia, as sharp falls in equities added to worries lacklustre global economic growth will hurt energy demand in an oversupplied market.
Asian shares fell continuing a global sell-off in equities that hit Wall Street overnight and saw the Dow reach its lowest level this year as concerns about the health of the world economy snowballed.
Analysts fear a slowdown in China, the world's second-biggest economy, could drag on global growth and curb energy demand bad news for oil prices at a time when markets are already oversupplied with crude.
10:50 am Rupee weakens further: The Indian rupee is moving towards 66 a dollar level, down 31 paise to 65.85 against dollar in morning trade.
The Sensex crashed 419.40 points or 1.52 percent to 27188.42 and the Nifty plunged 128.45 points or 1.53 percent to 8244.30. More than four shares declined for every share advancing on the Bombay Stock Exchange.
10:40 am Stocks in News: Monnet Ispat is in discussion with Bhushan Steel to sell its entire 35 percent stake in Orissa Sponge Iron & Steel Ltd (OSISL) , which owns iron ore reserves in the Odisha, Monnet's Group CFO Ajay Bhat told CNBC-TV18.
While refusing to divulge valuation details, Bhat said the stake sale would help the company cut its debt.
Alongside, Monnet has also finalized sale of its power business to JSW Steel , a deal that is expected to close in December and will take off that business' Rs 4,000-crore liability off Monnet's books, Bhat said.
Monnet's net debt, after the sale of the power business stands at Rs 7,000 crore, which will further reduce following stake sale in the Odisha mine company, he added.
Monnet is in talks with lenders to restructure part of its debt and does not foresee an immediate payments crisis, according to the CFO.
10:30 am Market Expert: A mix of fundamental and technical factors are dragging the market down, Ajay Srivastava, CEO, Dimensions Consulting tells CNBC-TV18.
"It is not as though the fundamentals have given away overnight; it is also that the structure of the market has changed," he says.
"Lots of margin calls, lots of people getting out, lots of people failing to meet their obligations on the midcap stories that they have bought into," he says.
He says the perceived insularity of India has been tested over the last three days and found wanting. He says there are problems in the global economy and India cannot remain isolated from it.
"Indian investors must accept the fact that we are part of the global markets, no matter what the politicians tell you, what the central bank tells you," he says.
He says it is still not time to bottomfish and sees the Nifty falling below 8000. According to Srivastava, a GDP growth of 6-7 percent and a price earnings multiple of 30-40 times is just not sustainable.
10:20 Buzzing: Shares of Tata Communications outperformed the equity market, rising 3.5 percent intraday as two big multinational companies are in race to buy the telecommunications and internet service provider's data centre business.
"Search engine giant Google Inc and ecommerce behemoth Amazon are among those in talks with the Tata Group to buy the data centre business of Tata Communications in a deal expected to fetch about Rs 4,261.4 crore to Rs 4,589.2 crore ($650-700 million)," said a media report.
10:10 am Rupee forecast: Nowithstanding the rupee's relative outperformance, the slide will conitnue a bit more in tandom with its emerging market peers, says Ju Wang of HSBC. She forecasts year-end target for rupee at 66 and can go all the way down to 67 next year.
On Friday, the Indian currency hit a fresh two-year low of 65.73 per dollar, down 19 paise compared to previous day's closing value of 65.54 per dollar.
Currencies in emerging market started correcting after China devalued its currency yuan unleasing some sort of currency war.
The rupee corrected the minimum compared to other emerging market currencies, down 4 percent against US dollar. Dollar Index gained 0.6 percent.
Brazilian Real depreciated 30 percent and Turkish Lira dropped 25.2 percent against dollar.
10:00 am Market Check
The market remained under pressure, though it showed some bit of recovery in morning trade. The 30-share BSE Sensex fell 348.88 points or 1.26 percent to 27258.94 and the Nifty dropped 106.20 points or 1.27 percent to 8266.55, the lowest level in last two-month.
The broader markets too slipped in-line with benchmarks. The BSE Midcap and Smallcap indices declined 1.3 percent each. Nearly four shares declined for every share advancing on the Bombay Exchange.
Infosys and TCS bucked the trend, rising over a percent. Lupin also gained 0.7 percent as Bank of America Merrill Lynch raised target price to Rs 2020 from 1800 and also upped earnings per share FY16/17/18 estimates by 2 percent/2 percent/3 percent, to factor in higher INR/USD (Rs 64.5/Rs 64/Rs 64 against earlier estimates of Rs 62 each).
Shares of ICICI Bank, HDFC, Larsen & Toubro, SBI, Tata Motors, ITC, Axis Bank, Reliance Industries and Bharti Airtel were the biggest contributors to Sensex's fall, down 1-4 percent.
Responsive Industries (down 7 percent), Godrej Properties (down 5 percent), Page Industries (down 5 percent), Gujarat Pipavav (down 5 percent) and PC Jeweller (down 4 percent) were the big losers in the midcap space. Other notable laggards included Sintex Industries (down 4 percent), Bombay Dyeing (down 4 percent), BEML (down 4 percent), Central Bank (down 4 percent) and Allahabad Bank (down 4 percent).
The Indian rupee was quoting at 65.72 to the dollar, down 0.18 paise over its previous close.
In other asset classes, gold was trading at USD 1163.2/ounce, up 1 percent over its previous close. Brent crude was trading at USD 46.12/barrel, down 1.07 percent and Nymex crude declined 1.21 percent to USD 40.82/barrel.
9:50 am Outperformer? One stock that is sticking its neck out in this bloody slaughter on Dalal Street. Amtek Auto which has been falling drastically for few days, is up 7 percent. The stock is at Rs 68.20, up Rs 4.45 on the BSE.
9:40 am FII view on India: The slump in global equity markets today can be attributed to the bouts of weakness persisting in emerging markets -- particularly China, where worse-than-expected PMI data seemed to be confirming the worst. Micheal Every of Rabobank expects emerging market stocks to continue to face weakness. "I think we're seeing real panic right across the market," he said. "India is relatively outperforming at the while. But investors will need to see decisive steps (by the government) in India."
9:30 am Market check: Bears are on a rampage as benchmark indices tumble. The Sensex is down 438.11 points or 1.6 percent at 27169.71 and the Nifty fell 130.55 points or 1.6 percent at 8242.20. About 215 shares have advanced, 1350 shares declined, and 27 shares are unchanged.
Bank Nifty, Capital Goods, Auto and Oil & Gas index are down 2-3 percent.
Bharti Airtel, Hero Motocorp, Tata Motors, Vedanta and SBI are major laggards in the Sensex. Only IT index is in the green. TCS and Infosys are up 0.5 -1 percent on a weak rupee.
The market has fallen sharply at opening. The Sensex is down 416.41 points or 1.5 percent at 27191.41 and the Nifty is down 129.80 points or 1.5 percent at 8242.95. The 50-share index is at a 2 month low. About 135 shares have advanced, 847 shares declined, and 22 shares are unchanged.
SBI, Bharti, Vedanta, Axis Bank and L&T are major laggards in the Sensex.
The Indian rupee continued its downtrend, hitting a fresh two-year low. The currency has opened at 65.73 per dollar, down 19 paise compared to previous day's closing value of 65.54 per dollar.
Pramit Brahmbhatt of Veracity said, "The rupee is expected to depreciate as overnight US equities traded weak and closed in red. Negative sentiment in the market will also force local equity to open weak as Asian markets have already opened on a weak note. The range for rupee is seen between 65-66/dollar today."
The dollar fell against the major currencies as bets dwindle on the Federal Reserve raising US interest rates next month for the first time in nearly a decade.
Most Asian equity markets slid to multi-month lows, tracking the hefty losses in offshore markets overnight, and as a survey on China's manufacturing sector slumped to a six-and-a-half-year low.
Wall Street was hammered overnight, with the S&P 500 erasing gains for the year and ending at a more-than-six-month low. The Dow Jones Industrial Average and the Nasdaq Composite plunged 2.06 and 2.82 percent, respectively, as investors weighed continued uncertainty about the timing of a rate hike and global growth concerns led by the slowdown in China.