Sensex cracks 587 points, Nifty ends at 7786; banks bleed

3:30 pm Market close: The market ended with severe cuts dragged sharply by banks. The Sensex dived 586.65 points or 2.2 percent at 25696.44, and the Nifty slipped 185.45 points or 2.3 percent at 7785.85. About 620 shares advanced, 2064 shares declined, and 100 shares were unchanged.

Bank Nifty fell 3.7 percent while Auto index was down 2.5 percent from previous close. Hindalco, Axis Bank, Vedanta, M&M and Tata Steel were major laggards. Sun Pharma was the only green stock in the Sensex.

3:15 pm Nomura on banks: The recent base rate cuts are likely to have an impact on net interest margin of banks in near-to-medium term but that is credit-positive in long run, says Nomura. HDFC Bank announced a big 35-basis point cut in its base rate to 9.35 percent from 9.7 percent (taking a cumulative base rate cut of 65 basis points from January 2015), the lowest in industry.

It was the third rate cut by the bank. The country's second largest private sector lender cut base rate by 15 bps on June 17 and by 15 bps on April 7. Canara Bank also cut base rate by 10 basis points to 9.9 percent on Monday.

Most banks till date have cut base rates by around 25-30 basis points and after this cut by HDFC Bank, their base rates are around 35-65 bps higher than HDFC Bank – such a large differential is difficult to sustain beyond 1-2 months, feels Nomura.

3:10 pm Market outlook: Market watchers are overestimating the impact of China's economic slowdown on emerging markets, JPMorgan's chief Asian and emerging market equity strategist said Monday.

Emerging markets suffered one of their worst routs on record last week, with investors pulling a combined USD 15.3 billion from bond and equity funds through August 27. The MSCI Emerging Markets Index is down nearly 18 percent year to date.

But JP Morgan's Adrian Mowat noted the US economy moved higher, and there was little impact on the rest of Asia when Japan's economy, then the world's second largest, turned lower in the early 1990s.

3:05 pm Market Update: The Sensex plunged 649.19 points or 2.47 percent to 25633.90 and the Nifty dropped 204.85 points or 2.57 percent to 7766.45.

About 478 shares have advanced, 2133 shares declined, and 97 shares are unchanged on the BSE.

3:00 pm German data: Rising output and orders helped Germany's manufacturing sector expand at its fastest pace in sixteen months in August, adding to signs that exports may help fuel growth in Europe's largest economy in the third quarter.

Markit's purchasing managers' index (PMI) for manufacturing, which makes up about one fifth of the German economy, rose to 53.3 from 51.8 in July.

That was above the 50 line that separates growth from contraction and slightly higher than a preliminary estimate of 53.2.

2:55 pm PNB slips 7%: Fitch Ratings says PNB's viability rating (VR) has been downgraded by one notch to 'bb' to reflect the growing risk to the bank's capital position from its mounting stock of stressed assets, which has risen at a faster rate than its capital replenishment.

The downgrade also reflects Fitch's expectation that capital buffers are unlikely to improve significantly even though the state is likely to inject capital into the bank in the financial year ending 30 March 2016 (FY16), with the bank's large stressed assets stock potentially taking longer to resolve than that of its peers.

Fitch Ratings has affirmed the ratings on nine Indian banks. The long-term issuer default ratings (IDR) on State Bank of India (SBI), Bank of Baroda, Bank of Baroda (New Zealand), Punjab National Bank (PNB), Canara Bank, IDBI Bank, ICICI Bank and Axis Bank have been affirmed at 'BBB-' while Indian Bank has been affirmed at 'BB+'. The outlook on the IDRs is stable, says Fitch.

2:50 pm Gold tops 27000: Rising for the third straight day, gold regained the Rs 27,000-mark by gaining Rs 200 at the bullion market today in line with a firm global trend amid pick up in wedding season buying by jewellers.

Silver too continued its upward journey and rose by Rs 150 to Rs 35,150 per kg on increased offtake by industrial units and coin makers.

Bullion traders said a firming global trend where gold extended its best monthly gain since January after a factory gauge in China shrank to a three-year low, deepening concern about the slowdown in the world's second-biggest economy and boosting demand for the metal as a safe-haven.

Globally, gold climbed 0.7 percent to USD 1,142.79 an ounce and silver added 0.3 per cent to USD 14.67 an ounce in Singapore.

2:45 pm Interview: At a time when talks are hinging on highly leveraged banking names that are fuelling market nervousness,  YES Bank is hoping to regain its market position and is looking to enter the consumer and retail segment. YES Bank, with is high exposure to the corporate segment is among the highly-leveraged banks. Corporate loans constitute about two-thirds of the bank's portfolio.

Speaking to CNBC-TV18, Rana Kapoor, MD & CEO of YES Bank, says that the bank is looking to shift its focus to retail and small and medium enterprise (SME) segments. The bank currently has 35 percent of its business in retail and SMEs.

Kapoor expects bank's SME share to grow to 55 percent in a year. By 2020, the bank is aiming for 45 percent involvement in retail segment and hopes to become third largest player.

Discussing the risk in commodities and infrastructure sector, Kapoor says the bank's exposure to steel is around 3 percent in small and medium size credit. He does not see any risk in infrastructure or its related sectors like cement.

2:40 pm Sharp fall in US likely?: The 300-points decline in Dow Jones futures suggested that US markets may open sharply lower on fears of China slowdown.

Data overnight showed activity in China's manufacturing sector slowed markedly in August, another signal that the world's second-largest economy is losing momentum.

2:35 pm Market falls further: The Sensex crashed 619.21 points or 2.36 percent at 25663.88 after hitting day's low of 25579.88 (down 703 points). The Nifty dropped 200.35 points or 2.51 percent to 7770.95.

The BSE Midcap cracked 2.4 percent and Smallcap lost 2.7 percent. About 459 shares have advanced, 2133 shares declined, and 83 shares are unchanged on the BSE.

2:30 pm Escorts dives: Escorts's total tractor sales plunged 33.7 percent to 2,402 units in August against 3,624 units sold in the year-ago period. Domestic sales declined 25.2 percent to 2,355 units on monsoon concerns.

2:25 pm Oil also sinks: Crude oil prices fell nearly 4 percent as investors taking profits after Brent and US crude soared significantly in previous sessions.

Brent crude dropped 3.77 percent to USD 52.11 a barrel and NYMEX crude declined 3.88 percent to USD 47.29 a barrel.

2:20 pm Telephone subscriber base: The total telephone subscriber base in the country rose marginally to reach 100.69 crore at the end of June, sectoral regulator TRAI said today.

The subscriber base stood at 100.20 crore at the end of May, Telecom Regulatory Authority of India (TRAI) said. The wireless base (GSM and CDMA) rose 0.51 percent to 98.08 crore at the end of June from 97.57 crore in May, while the fixed line base declined to 2.61 crore from 2.62 crore.

"As on June 30, 2015, the private access service providers held 91.75 percent market share of the wireless subscribers whereas BSNL and MTNL, the two PSUs access service providers, held only 8.25 percent market share," TRAI said.

The wireless tele-density increased to 77.90 percent from 77.58 at the end of May. Wireless subscription in urban areas increased to 56.29 crore at the end of June from 55.88 crore last month and wireless subscription in rural areas increased from 41.69 crore to 41.78 crore during the same period.

2:15 pm Shakers & Movers: Axis Bank topped the selling list on Sensex, down over 5 percent followed by Coal India and Hindalco Industries with 4.5 percent loss.

The sharp fall in HDFC, HDFC Bank, L&T, ITC, ICICI Bank, SBI, Reliance Industries, Lupin, Tata Motors, Bharti Airtel (which dropped 2-3.5 percent) indicated that there may be some selling by FIIs.

FIIs sold more than Rs 17,500 crore worth of equity shares in August, the biggest ever in last 10 years. In 2008 crash, they sold Rs 17,326.30 crore worth of shares in January.

However, Sun Pharma, Infosys and TCS bucked the trend, up 0.2-0.6 percent, though they came off day's high.

2:10 pm China PMI drags Asia: Asian stocks slumped on the first trading day of September, with Japan's Nikkei 225 index chalking up a near 4 percent loss, after surveys of China's mammoth manufacturing sector showed a further loss of momentum in the world's second-biggest economy.

China's Shanghai fell 1.3 percent and Hang Seng declined 2.2 percent. Kospi was down 1.4 percent.

2:05 pm Europe extends losses: European stock quickly accelerated losses, as China's economy continued to disappoint investors.

London's FTSE 100, Germany's DAX and France's CAC declined 2.5 percent each.

Two sets of key Chinese data disappointed traders on Tuesday; the official manufacturing purchasing managers' index (PMI) edged down to 49.7 in August from 50 in July, while the final Caixin/Markit manufacturing PMI came in at 47.3 in August, down from 47.8 in July.

2:00 pm Market check: The market extended losses in afternoon trade, dragged by banking & financials. The Sensex plunged 562.54 points or 2.14 percent to 25720.55 and the Nifty crashed 179.95 points or 2.26 percent to 7791.35.

The BSE Midcap and Smallcap indices, too, fell over 2 percent each. About four shares declined for every share advancing on the Bombay Stock Exchange.

1:53 pm Market slips: The market slips further dragged by banks. The Nifty is down 172 points or 2 percent at 7799.30. The Sensex is down 514.91 points or 1.9 percent at 25768.18. About 508 shares have advanced, 1987 shares declined, and 94 shares are unchanged.

Bnak Nifty is down 3.7 percent, Capital Goods , Metals slipped 3 percent, Auto Index falls 2.7 percent from previous close.

1:40 pm China's measures: China's central bank plans to tighten rules on trading of currency forwards from October, sources with direct knowledge of the matter told agency, in a move to curb speculation and volatility after a shock devaluation of the currency last month.

The People's Bank of China (PBOC) has repeatedly intervened to stabilise the yuan since the August 11 devaluation - billed as free-market reform - sent shockwaves through global markets and depressed emerging currencies.

"The forwards move is yet another step to cushion unexpected strong expectations of yuan depreciation after the devaluation," said a senior trader at a major European bank in Shanghai. The sources said the PBOC will require banks trading currency forwards to set aside reserves from October 15.

1:30 pm Banks rating: Rating agency Fitch affirmed credit rating for nine Indian banks. The long-term Issuer Default Ratings (IDR), that is used to measure bank's credit risk ability, on eight banks – SBI , IDBI , Punjab National Bank (PNB), ICICI , Bank of Baroda (BoB), BoB (New Zealand), Axis Bank , Canara Bank has been affirmed at ''BBB-''. Only, Indian Bank has been affirmed at ''BB+''. In an interview with CNBC-TV18, Saswata Guha, Director – Financial Institutions, Fitch Ratings (India) said that PNB is the weakest among the state banks because of its stressed assets situation. The agency downgraded PNB's Viability Rating (VR) to 'BB' reflecting the risk to bank's capital position on back of expanding stressed assets.

1:20 pm Market check: Bears are rampaging Dalal Street once again. The Sensex plunged 428.61 points or 1.6 percent at 25854.48 and the Nifty is down 138.40 points or 1.7 percent at 7832.90. About 524 shares have advanced, 1945 shares declined, and 91 shares are unchanged.

Axis Bank, HDFC, Coal India, L&T and Hindalco are major laggards while TCS, Infosys, Sun Pharma, NTPC and ONGC.

The market continues to feel the pinch as banks remain under heavy selling pressure. The Sensex is down 337.32 points or 1.3 percent at 25945.77, and the Nifty slips 110.70 points or 1.4 percent at 7860.60. About 576 shares have advanced, 1819 shares declined, and 100 shares are unchanged.

HDFC, Axis Bank, L&T, Hindalco and SBI are major laggards while Infosys, TCS, Sun Pharma, NTPC and ONGC are top gainers in the Sensex.

The rupee firmed up further by 24 paise to 66.24 against the US currency in late morning deals following sustained bouts of dollar selling by exporters and banks.

The rupee opened higher at 66.38 per dollar against yesterday's closing level of 66.48 at the Interbank Foreign Exchange (Forex) market. Globally, the US dollar was lower in early Asian trade as nervous investors look to upcoming data from China and the United States to gauge whether they need to further wind back carry trades, bets in risk assets funded by these currencies.

12:55 pm Market Update: Equity benchmarks extended losses in afternoon trade. The Sensex dropped 344.35 points or 1.31 percent to 25938.74 and the Nifty fell 110.95 points or 1.39 percen to 7860.35.

About 577 shares have advanced, 1816 shares declined, and 99 shares are unchanged on the BSE.

12:40 pm Interview: With Inox Wind winning the 100 MW wind power project at Lahori, MP from Ostro Energy, the company expects to grow its margins to 20 percent in the next fiscal year, says Devansh Jain, wholetime Director, Inox Wind.

Speaking to CNBC-TV18, Jain says the timeline for this project is March which would make its current order book grow to 1250 MW.

With one of the largest orderbook in the wind energy sector, the company's market share is close to 30 percent.

12:30 pm Jindal Steel to shut mine: One of Australia's oldest coal mines today said it was being shut by its Indian owner Jindal Steel and Power as market conditions in the sector continue to deteriorate and financial pressures on producers mount.

The closing of the Russell Vale colliery 100 kms (62 miles) south of Sydney comes amid widening losses reported by operator Wollongong Coal, majority-owned by Jindal.

Idling of the colliery, which started operating in 1887, will result in 80 job losses and follows unsuccessful efforts by Jindal to turn Wollongong Coal around, said Milind Oza, the chief executive of the operating firm.

"This decision is not taken lightly and we have continually attempted to avoid this unfortunate situation by undertaking a series of workforce restructurings," Wollongong Coal's Oza said.

Wollongong Coal reported a AD199.2 million (USD 142 million) loss in the financial year to March 31, following a AD 169.4 million loss the previous year.

Jindal Steel acquired a majority stake and management control of Wollongong Coal in 2013. Most of the coal was being exported to make steel for Jindal in India.

12:00 pm Market Check
Equity benchmarks continued to see selling pressure in noon trade, weighed by banking & financials and select index heavyweights like Reliance Industries, ITC and L&T.

The Sensex dropped 293.90 points or 1.12 percent to 25989.19 and the Nifty shed 97.65 points or 1.23 percent to 7873.65. The market breadth remained weak as about 1657 shares have declined against 635 shares advanced on the Bombay Stock Exchange.

Globally, Asian markets declined as China's manufacturing data curbed risk appetite. China's official manufacturing PMI edged down to 49.7 in August from 50 in July. Brent crude traded around USD 52 a barrel, up by more than USD 12 from August lows.

Maruti Suzuki fell nearly 1 percent post lower than expected sales in August. Export sales declined 11 percent year-on-year while domestic sales grew by 8.6 percent driven by Ciaz, S-Cross etc. Eicher Motors continued to report strong growth in its Royal Enfield sales that increased 59 percent. Tata Motors and M&M slipped over a percent ahead of sales numbers.

Banks weakened in trade. HDFC Bank lowered base rate by 35 basis points to 9.35 percent, the lowest in the industry. Canara Bank also cut base rate by 10 basis points to 9.9 percent.

Fitch affirmed the long term issuer default ratings or IDR on nine banks including SBI, Bank of Baroda, Punjab National Bank, ICICI Bank and Axis Bank. The ratings agency, however, downgraded PNB's viability rating by one notch to 'bb'. The downgrade reflected the growing risk to bank's capital position from its mounting stock of stressed assets.

Oil marketing companies were weak today after cut in petrol prices by Rs 2 per litre and diesel by 50 paise a litre.

11:55 am Buzzing: Shares of aviation stocks are flying high as aviation turbine fuel (ATF) price is slashed by 11.6 percent to Rs 40,591/kl. This is second time ATF price cut in last two months. Fuel price was cut by a massive 9.5 percent, or Rs 4,860, to Rs 46,407/kiloLitre in August.

Both Jet Airways and SpiceJet jumped 2-3 percent intraday.

Hovering at around 6.5-year low, weak crude prices have been beneficial for airline companies. Oil prices had already been under pressure last fall when OPEC decided in November to maintain production levels and defend market share rather than cut output to prop up prices.

11:40 am Market check: The market skid further as the Sensex is down 303.87 points or 1.2 percent at 25979.22 and the Nifty slips 97.55 points or 1.2 percent at 7873.75. About 641 shares have advanced, 1576 shares declined, and 84 shares are unchanged.

Axis Bank, HDFC, Bharti Airtel, Hindalco and SBI are among major laggards in the Sensex. Among the gainers are TCS, Infosys, Sun Pharma, NTPC and ONGC.

11:30 am  Auto sales: Maruti Suzuki, the country's largest car maker, has sold 1,17,864 vehicles in August, a growth of 6.4 percent over a year-ago period driven by Ciaz, S-Cross and Alto Automatic but impacted by big fall in compact car sales and lower exports. Overall sales growth was much lower than expected as Nomura estimated 9.2 percent growth year-on-year at 1.21 lakh units. Domestic sales in August grew by 8.6 percent to 1.06 lakh units whereas export declined 11.1 percent to 11,083 units compared to same month last year.

The market continues to be under pressure mostly dragged by banks. The Sensex is down 189.30 points or 0.7 percent at 26093.79 and the Nifty slips 59.30 points or 0.7 percent at 7912. About 666 shares have advanced, 1427 shares declined, and 67 shares are unchanged.

HDFC, Lupin, Axis Bank, Bharti Airtel and Hindalco are among major laggards while IT stocks are up on rising rupee. Sun Pharma, Infosys, TCS, ONGC and NTPC are top gainers in the Sensex.

Oil prices fell 3 percent in Asian trade, with investors covering short positions and taking profits after Brent and US crude soared more than 8 percent in the previous session. Both Brent and US crude prices dropped nearly USD 2 a barrel shortly after trading in Brent started on Tuesday before recovering later in the session.

10:55 am Market Update: The 30-share BSE Sensex declined 199.42 points or 0.76 percent to 26083.67, and the 50-share NSE Nifty fell 68.15 points or 0.85 percent to 7903.15.

About 643 shares have advanced, 1424 shares declined, and 68 shares are unchanged on the BSE.

10:40 am Maruti sales: Maruti Suzuki has sold 1,17,864 vehicles in August, a growth of 6.4 percent over a year-ago period driven by Ciaz, S-Cross and Alto Automatic.

Overall sales growth was much lower than expected as Nomura estimated 9.2 percent growth year-on-year at 1.21 lakh units. Big fall in compact car sales and lower exports impacted impacted overall sales growth.

Domestic sales in August grew by 8.6 percent to 1.06 lakh units whereas export declined 11.1 percent to 11,083 units compared to same month last year.

Passenger cars sales, which contributes 35 percent to total sales, increased by 4.4 percent year-on-year to 86,454 units, impacted by compact car sales.

Compact cars sales (Swift, Ritz, Celerio and Dzire) degrew by 11.3 percent while mini car segment (Alto, Wagon R) reported a 8.6 percent growth at 37,665 units. Sales of mid size cars jumped 8,212 percent to 4,156 vehicles, largely driven by Ciaz launched in October 2014 (this segment also include SX4).

10:20 am Moody's on realty developers: Weak housing sales and stagnant prices will pose challenge to big real estate developers over the next 12 months as their cash flows and project execution capabilities get affected, ratings agency Moody's said.

Developers will not reduce price to boost sales, rather will continue with their strategy to reduce apartment size and offer freebies, Moody's Investors Service said. However, the agency said that "solid economic growth" would give some support to housing sales, while gradual easing of lending rates would boost investment activity.

"India's largest property developers will continue to face a challenging operating environment over the next 12 months including weak cash flows, flat sales and stagnant prices," the agency said in a statement while releasing a report on the Indian property market titled 'Cash Flows to Remain Weak Amid Flat Sales and High Costs' on Tuesday. Sales volumes will remain weak because of unaffordable housing prices, resulting in unsold inventories.

"Aggregate cash flow for India's largest property developers will remain weak over the coming 12 months because the companies' sales will be flat and their costs will stay high," Moody's said, adding that the construction costs have increased in the past four years owing to high inflation.

10:00 am Market Check
The market fell for the second consecutive session today, dragged by banking & financials, capital goods, FMCG and select auto stocks. Weak July core sector data and lower than expected first quarter GDP hurt sentiment. Even weak global cues have an impact on market.

The Sensex declined 176.38 points to 26106.71 and the Nifty fell 52.85 points to 7918.45. The BSE Midcap and Smallcap indices lost 0.3-0.7 percent. About 568 shares have advanced, 1139 shares declined, and 60 shares are unchanged on the BSE.

HDFC topped the selling list on Sensex, down 2.4 percent followed by HDFC Bank, L&T, Reliance Industries, SBI, Axis Bank, Lupin, Tata Motors and Bharti with 1-1.9 percent loss.

However, Infosys, TCS, Sun Pharma and ONGC bucked the trend, up 1-1.5 percent.

9:50 am Monsoon update: Monsoon has been deficient by 11 percent so far with August recording 22 percent less than normal rainfall, raising the prospect of lower foodgrains production for the Kharif season than 2014 if the situation does not improve in September.

June witnessed excess precipitation of 16 percent, while there was a monsoon deficit of 16 percent in July. IMD had predicted around 16 percent deficient rainfall during August and September.

Amid bleak monsoon prediction for the next month too, Indian Agriculture Research Institute (IARI), the government's premier agri-research body, said the initial Kharif production may fall below 2014's level of 126.31 million tonnes if crucial September rains are not well distributed.

9:30 am  FII view: Jonathan Garner, Morgan Stanley has maintained overweight rating on India, as India is the only major emerging market (EM) where economists see a near-term pick up in GDP growth driven by both consumer cyclical demand already evident in auto sales and capital expenditure demand driven by government progress in unblocking infrastructure approvals. He said India also benefits more than any other large EM from lower oil and commodity prices as it is a major importer of these items. According to him, inflation is below the central bank target and bond yields are falling with several more interest rate cuts likely over the next six months.

9:22 am Market check: The Sensex is down 195.91 points or 0.7 percent at 26087.18, and the Nifty slips 57.75 points or 0.7 percent at 7913.55.
About 259 shares have advanced, 824 shares declined, and 33 shares are unchanged.

Sun Pharma, TCS, ONGC, Cipla and Maruti are top gainers while SBI, HDFC, ICICI Bank, L&T and Axis Bank are major laggards in the Sensex.

The market has opened lower on economy data. The Sensex is down 194.50 points or 0.7 percent at 26088.59 and the Nifty is down 63.35 points or 0.8 percent at 7907.95. About 123 shares have advanced, 409 shares declined, and 31 shares are unchanged.

Banks are dragging with top losers like SBI and HDFC. Vedanta, Tata Steel, Bajaj Auto, Tata Motors and L&T are among laggards while ONGC, GAIL, Maruti, Bharti and Cipla are top gainers in the Sensex.

The country's first quarter (April-June) gross domestic product in fiscal year 2015-16 slipped from 7.5 percent in the previous quarter (January-March) to 7 percent.

The GDP growth data is calculated under the new methodology (GDP at market prices) that the government's statistics department moved to last year.

Meanwhile on the global front, Asian stocks declined early, following a negative lead from Wall Street and as investors digested the slew of economic data out of China.

China's official manufacturing purchasing managers' index (PMI) edged down to 49.7 in August from 50 in July, just below the 50-mark that separates expansion from contraction. The final Caixin/Markit manufacturing purchasing managers' index (PMI) came in at 47.3 in August, above a preliminary reading of 47.1 but down from 47.8 in July.

Overnight, US equity markets ended in the red to chalk up their worst month since 2012. The Nasdaq Composite closed down 1.07 percent, while the Dow Jones Industrial Average and S&P 500 dropped 0.69 and 0.84 percent, respectively.