Sensex up 162 points, Nifty ends above 7800 on RBI rate cut
29 September 2015
3:30 pm Market Closing: Equity benchmarks trimmed losses in late trade despite RBI's rate cut as investors may be booking profits on every rally amid global growth woes.
The Sensex rose 161.82 points or 0.63 percent to 25778.66 and the Nifty climbed 47.60 points or 0.61 percent to 7843.30.
HDFC, Maruti Suzuki, M&M, Coal India, Larsen & Toubro and IndusInd Bank topped the buying list, up 1-3.5 percent. However, Vedanta crashed 5.4 percent followed by Tata Steel, Hindalco, BPCL and Adani Ports with 3-4 percent loss.
3:20 pm Zee's new launch: Leading media and entertainment firm Zee Entertainment Enterprises Limited (ZEEL) will launch a new television channel, Zee Magic, for French audiences in Africa.
"Zee Magic is a completely customised general entertainment channel for French audiences in Africa, showcasing French dubbed Indian movies, series, food and reality shows," the company said in a statement today.
The channel will be available on the Canal Plus Overseas platform from October 1.
"Our corporate philosophy of 'Vasudhaiva Kutumbakam' meaning 'The world is my family' is at the forefront of bringing authentic and entertaining content to our fast growing audiences across the globe," Essel Group and ZEEL Chairman Subhash Chandra said.
3:10 pm MFs raise exposure to IT: Mutual fund managers continued to maintain bullish stance on software companies, as they raised their total allocation in the sector to an all time-high of over Rs 40,500 crore in August due to depreciation in rupee.
In comparison, equity fund managers deployment in software stocks stood at Rs 29,668 crore during August last year. Industry experts said that fund managers raised their allocation to software stocks due to declining rupee against the US dollar.
Like exporters, IT companies earn majority of their revenue in dollars. Depreciating rupee means exporters get more rupee per US dollar.
As per the data available with Securities and Exchange Board of India (Sebi), overall deployment of equity funds in software stocks stood at Rs 40,602 crore in August compared with Rs 38,404 crore in the previous month.
Besides, exposure to software stocks was at 10.27 percent in August against 9.40 percent in the preceding month. Furthermore, IT was the second-most preferred sector with fund mangers after banks.
3:00 pm Market halves gains: The market halved its gains in late trade with the Sensex rising 214.08 points to 25830.92 and the Nifty climbing 67.60 points to 7863.30 due to profit booking in rate sensitives. About 1250 shares have advanced, 1257 shares declined, and 113 shares are unchanged on the BSE.
Bank Nifty trimmed gains to 200 points from more than 300 points as ICICI Bank and Axis Bank turned flat. SBI and HDFC Bank were off day's high. Reliance Industries and ITC, too, witnessed some profit booking.
2:55 pm Rajan on PSU banks: RBI governor Raghuram Rajan says the government has been trying to improve the governance structure in PSU banks. The government has indicated its desire to let PSU banks work independently and has plans for raising capital for PSU banks, he adds.
2:50 pm SBI cuts base rate: State Bank of India, the country's largest lender, has reduced its benchmark lending rate by 40 basis points to 9.3 percent after RBI's rate cut.
It is the second bank to cut base rate today, immediately after RBI move. Andhra Bank already slashed base rate by 25 basis points to 9.75 percent with effect from September 29.
2:40 pm RBI governor: In a conference call, Governor Raghuram Rajan says RBI's stance will continue to be accommodative. He expects rate cut transmission to take place soon and expects inflation to slip around 5 percent in next one year
"We have been trying to encourage a less cash society," he says.
2:30 pm Sun TV in focus: In a major relief to Sun TV Group, the Delhi HC has allowed Red FM to extend license till November 30.
It has been granted extension in three circles-- Delhi, Mumbai and Kolkata. Here, the licenses were to expire on September 30.
However, the Digital Radio has sought migration of its license from Phase II to Phase III, which still remains pending.
Red FM is an associate company of Kalanithi Maran-promoted Sun TV Group.
Earlier, the FM channel was denied security clearance and hence, participation in the stage III of FM auctions.
The government had declined security clearance to the group on the basis of inputs received against former Telecom Minister Dayanidhi Maran, his brother Kalanithi Maran and Sun TV.
1:45 pm Economic Affairs Secretary on rate cut: In a signal to banks to cut lending rates, government today said it will review the interest rate on small savings, like PPF and Post Office deposits, to bring them in line with market rates.
With small saving deposits commanding an interest rate of 8.7 to 9.3 percent, banks have been reluctant to transmit the entire policy rate cut by RBI to borrowers. They want to keep their deposit rates attractive to match with those in small saving schemes, popular among masses.
"It has also been decided that government will undertake review of small saving interest rate also," Economic Affairs Secretary Shaktikanta Das told reporters.
He said this was being done in response to the 0.5 percent cut in key lending (repo) rate announced by the Reserve Bank earlier in the day. The Secretary said the government will review all aspects of small saving deposits.
1:35 pm Interview: Consumption will start picking up in the next six months to one year, says Marico chairman Harsh Mariwala. He is cautiously optimistic on the economy.
He says Marico sees 25 percent of its turnover coming from rural India, while the balance comes from urban areas. Going ahead, he is hopeful that urban demand will start picking up soon.
1:30 pm M&M rallies: Mahindra & Mahindra, India's leading SUV manufacturer, has achieved a production milestone of 7 lakh vehicles from its automotive plant in Haridwar, Uttarakhand.
Inaugurated in December 2005, the Haridwar plant currently manufacturers Bolero, Scorpio S2, Gio (passenger & load), Alfa (passenger & load) and Champion range of Mahindra products.
1:20 pm Rate cut impact: Home and corporate loans will cost less as the Reserve Bank lowered the key interest rate by 0.50 percent - the biggest cut in over three years - to bolster the economy.
In its fourth bi-monthly monetary policy for the current fiscal, RBI cut benchmark repurchase (repo) rate from 7.25 percent to 6.75 percent, lowest in four-and-half-years.
RBI Governor Raghuram Rajan, who had faced growing pressure from the government as also industry to reduce one of Asia's highest borrowing costs, justified the bigger than expected reduction saying consumer inflation was likely to be at 5.8 percent, below the 6 percent target for January.
The focus should now shift to bringing inflation to around 5 percent by March 2017, he said, adding that RBI will be vigilant for signs of monetary policy adjustments that are needed to stick to the "deflationary path".
1:15 pm Buzzing: Shares of Lanco Infratech surged nearly 11 percent following reports that the company may sell power projects having a capacity of 3,000 MW from 2018 onwards and expects to get Rs 25,000 crore, which would help pare debt and also infuse fresh capital into the group.
The scrip had rallied over 17 percent in the previous session also, as the company's arm, Lanco Kondapalli Power has entered into power purchase agreements with electricity distribution companies of Telangana and Andhra Pradesh.
L Madhusudhan Rao, Executive Chairman of Lanco, said the current power portfolio of the group is expected to touch 8,000 MW by 2018 from the current 3,400 MW. Lanco had Rs 33,000 crore debt as on March 31, 2015.
1:10 pm FM on GDP: Finance Minister Arun Jaitley said he would reassess the official gross domestic product forecast for Asia's third-largest economy in the current fiscal year that ends next March.
The government now forecasts that the economy would achieve real growth of around 8 percent in the 2015/16 fiscal year. The pace of growth slowed by more than expected to 7 percent in the quarter to June.
1:05 pm Gainers & Losers: Index heavyweight HDFC topped the buying list, up 4 percent followed by HDFC Bank, L&T, ITC, Infosys, Reliance Industries, SBI, M&M, Tata Motors and HUL with 1-3 percent upside.
However, Dr Reddy's Labs, Vedanta, Bharti Airtel, Tata Steel and Hindalco Industries lost 1-5 percent.
1:00 pm Market Check
Equity benchmarks showed spectacular bounce back in afternoon trade, especially after the Reserve Bank of India slashed repo rate by 50 basis points to 6.75 percent. Banking & financials, auto and capital goods stocks took the lead.
The 30-share BSE Sensex rallied 218.11 points or 0.85 percent to 25834.95 and the 50-share NSE Nifty climbed 73.50 points or 0.94 percent to 7869.20. The BSE Midcap also gained 0.3 percent.
The rupee recovered sharply from day's low while bond yields declined nearly 2 percent after the Reserve Bank of India surprised with repo rate cut. The currency rebounded to 66.03 a dollar in afternoon trade compared to opening value of 66.35 a dollar.
12:50 pm Cushman & Wakefield on rate cut: The Reserve Bank of India's (RBI) decision to cut interest rates by 50 basis points amidst stable inflation indicators, augers well for steady economic growth and is expected to bolster investment demand, says Sanjay Dutt, Managing Director, India, Cushman & Wakefield.
With the latest interest revision, the RBI has cut repo rate by a total of 125 basis points this year to a four-year low that should act as a catalyst to revive sentiments in the real estate sector, he believes.
According to him, at a time when Indian cities are witnessing subdued housing sales, this correction in prime lending rates would help stimulate home buyers' interest and spur home-buying decisions.
However, the extent to which lenders pass on the benefits to customers would determine the actual magnitude of increased housing sales. On the developers' part, the cost of borrowing could also decrease marginally, who have been reeling under high funding cost and increasing costs of construction, Dutt says.
12:40 pm Europe Update: European equities opened sharply lower today with investors keeping an eye on the auto sector amid the Volkswagen emission scandal and on the commodity stocks after miner Glencore tanked on Monday amid a commodities rout.
London's FTSE 100 was off by around 1.1 percent, the German DAX fell 1.4 percent while the French CAC tumbled 1.5 percent.
12:35 pm Asia sinks: Asian share markets came under intense selling pressure, with Japan's Nikkei 225 index losing over 4 percent, following a steep retreat on Wall Street as below-view data intensified concerns about the health of China's economy. China's Shanghai Composite declined 2.06 percent at close and Hang Seng fell 3.23 percent.
In the previous trading session, official data showed profits earned by Chinese industrial companies fell 8.8 percent in August from a year earlier, underscoring persistent signs of headwinds in the world's second-biggest economy.
Commodity shares were among the biggest casualties as fears of weaker Chinese demand sent prices of commodities tumbling. Further adding to the 'risk-off' sentiment was the near 30 percent slump in the London-listed shares of commodities and mining behemoth Glencore on Monday.
Commodity-linked currencies also lost their footing, with the Australian dollar and the New Zealand dollar dropping 0.6 and 0.4 percent respectively against the U.S. dollar in Tuesday's Asian trade.
12:25 pm Moody's on rate cut: The 50 basis point cut in repo rate was higher than market expectation of 25 basis points. This suggests that the RBI sees underlying growth trends as subdued enough to require more aggressive stimulus, given the rising external headwinds to growth, says Atsi Sheth, Associate Managing Director of Moody's Investors Service.
It also suggests that the RBI does not view inflation as a key risk at this point of time. The economic impact of the cut will depend on the speed and extent to which it translates into lower borrowing costs for households and investors, she adds.
12:20 pm GDP forecast: The Reserve Bank today revised downwards its real GDP forecast for 2015-16 to 7.4 percent from earlier expectation of 7.6 percent, saying that growth is expected to pick up in the latter part of the fiscal.
"Overall, lead/coincident indicators, the forward looking surveys and estimates from model-based forecasts warrant a downward revision of Gross Value Added (GVA) growth to 7.4 percent in FY16 from the projection given in the April Monetary Policy Report (MPR)," RBI said in its Monetary Policy Report.
It said growth in real GVA at basic prices is expected to be around 7 percent in the third quarter of 2015-16 before firming up to around 7.6 percent in the fourth quarter with risks evenly balanced around this projection.
The report, however, said real GVA growth is expected to pick up gradually in 2016-17 on a shallow cyclical upturn, driven by an expected normal monsoon and some improvement in external demand, but assuming no structural changes induced by policy measures and the absence of major supply shocks.
12:15 pm Suzlon in News: Wind turbine maker Suzlon Energy today said it has completed the commissioning of 100.8 MW wind power turnkey project for CLP India. The project is located at Tejuva, Jaisalmer in Rajasthan.
"The project will provide electricity to over 50,000 homes and curb 0.21 million tonnes of CO2 emissions annually. Suzlon will offer operations and maintenance for 20 years through an Integrated Service Package contract," the company said in a statement.
Elaborating on the project, the firm said: "The project comprises of 48 WTGs (Wind Turbine Generator) of Suzlon's robust S97- 2.1 MW wind turbines... designed to optimally harness the available wind resources and deliver higher energy, productivity, improved serviceability and higher return on investment (ROI) to customers.
12:10 pm Market Expert: Nirmal Jain of IIFL feels 50 basis points rate cut may turn out to be a game-changer. He says the government must accelerate reform process now.
12:00 pm Market Check
The market continued to see marginal selling pressure, though it recouped losses from day's low post rate cut by RBI. Pharma, metals and telecom stocks remained under pressure while select technology, capital goods and banking & financials supported the market.
The Sensex fell 25.93 points to 25590.91 and the Nifty dropped 11.45 points to 7784.25. About 866 shares have advanced against 1306 shares declined on the BSE.
The Reserve Bank of India surprised street by cutting repo rate by 50 basis points to 6.75 percent against forecast of 25 basis points. Repo rate slipped below 7 percent for first time Since March 2011.
Andhra Bank is the first one which reacted by cutting its base rate by 25 basis points to 9.75 percent w.e.f. today post RBI's surprise repo rate cut.
11:55 am Market Update: Equity benchmarks are still under pressure, though showed smart recovery from day's low. The Sensex declined 97.82 points to 25519.02 and the Nifty fell 36.70 points to 7759.
About 801 shares have advanced, 1338 shares declined, and 98 shares are unchanged on the BSE.
11:50 am FPI investment limits: RBI says the limits for FPI investment in central government securities will be increased in phases to 5 percent of the outstanding stock by March 2018.
In aggregate terms, this is expected to open up room for additional investment of Rs 1.2 lakh crore in the limit for central government securities by March 2018 over and above the existing limit of Rs 1,53,500 crore for all government securities (G-sec).
The limits for FPI investment in debt securities will henceforth be fixed in rupee terms.
Additionally, there will be a separate limit for investment by FPIs in the state development loans (SDLs), to be increased in phases to reach 2 percent of the outstanding stock by March 2018. This would amount to an additional limit of about Rs 50,000 crore by March 2018, it says.
The increase in limits will be announced every half year in March and September and released every quarter.
11:45 am Liquidity conditions eased considerably during August to mid-September. In addition to structural factors such as deposit mobilisation in excess of credit flow, lower currency demand and pick-up in spending by the government contributed to the surplus liquidity.
In response, the Reserve Bank conducted variable rate reverse repos of overnight and longer tenors ranging from 2 to 20 days. As a result, the average net daily liquidity absorption by the Reserve Bank increased from Rs 12,000 crore in July to Rs 26,100 crore in August and further to Rs 54,400 crore in September (up to September 15). Money market rates generally remained below the repo rate.
11:40 am Rate cut transmission by banks?: RBI says the Federal Reserve has postponed policy normalisation. Markets have transmitted the Reserve Bank's past policy actions via commercial paper and corporate bonds, but banks have done so only to a limited extent.
The median base lending rates of banks have fallen by only about 30 basis points despite extremely easy liquidity conditions. This is a fraction of the 75 basis points of the policy rate reduction during January-June, even after a passage of eight months since the first rate action by the Reserve Bank. Bank deposit rates have, however, been reduced significantly, suggesting that further transmission is possible.
11:35 am RBI says while the Reserve Bank's stance will continue to be accommodative, the focus of monetary action for the near term will shift to working with the Government to ensure that impediments to banks passing on the bulk of the cumulative 125 basis points cut in the policy rate are removed.
The Reserve Bank will continue to be vigilant for signs that monetary policy adjustments are needed to keep the economy on the target disinflationary path.
The fifth bi-monthly monetary policy statement will be announced on December 1, 2015.
11:30 am RBI on GDP growth: With global growth and trade slower than initial expectations, a continuing lack of appetite for new investment in the private sector, the constraint imposed by stressed assets on bank lending and waning business confidence, output growth projected for 2015-16 is marked down slightly to 7.4 percent from 7.6 percent earlier.
11:25 am RBI on H2FY16: The modest pick-up in the growth momentum in the first half of 2015-16 benefited from soft commodity prices, disinflation, comfortable liquidity conditions, some de-clogging of stalled projects, and higher capital expenditure by the central government. Underlying economic activity, however, remains weak on account of the sustained decline in exports, rainfall deficiency and weaker than expected momentum in industrial production and investment activity.
11:20 am Inflation: RBI says focus should now shift to bringing inflation down to 5 percent by FY17-end. "We expect CPI inflation to average around 5.5 percent in October-December & 5.8 percent in Jan-March 2016 and expect CPI inflation to moderate to 4.8 percent in January-March 2017."
11:15 am RBI says foreign investment capital in government bonds to be relaxed in phases to 5 percent by March 2018. Held-to-maturity limit for government bonds holding cut to 21.5 percent from 22 percent w.e.f January 2016, it adds.
According to the Reserve Bank, hike in foreign investment limit in bonds will be announced every March, September. Foreign investment limits in debt will be fixed in rupee terms.
11:10 am The Reserve Bank cut FY16 GDP growth target to 7.4 percent from 7.6 percent and expects CPI inflation at 5.8 percent in January 2016.
11:05 am RBI says on the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL)
"We decided to continue providing liquidity under overnight repos at 0.25 percent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 percent of NDTL of the banking system through auctions; and continue with daily variable rate repos and reverse repos to smooth liquidity," it explains.
Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 percent, and the marginal standing facility (MSF) rate and the bank rate to 7.75 percent, it says.
11:00 am Market Check
The market recovered sharply with the Nifty hitting 7800-mark after the Reserve Bank of India, surprisingly, cut repo rate by 50 basis points to 6.75 percent. Economists were expecting a 25 basis points cut in repo rate.
The Sensex gained 16 poiints to 25633 and the Nifty rose 7 points to 7802.
Shares of HDFC, HDFC Bank and State Bank of India turned positive, up 1.5 percent, 0.5 percent and 0.3 percent, respectively.
Capital goods majors also rebounded with the L&T and BHEL rising marginally. TCS and Infosys too supported recovery, up 0.7 percent each.
However, ICICI Bank, Dr Reddy's Labs, Sun Pharma, Bharti Airtel, Axis Bank, Tata Motors, ONGC and Vedanta declined 1-5 percent.
10:52 am Market Update: Equity benchmarks extended losses with the Nifty breaching 7700 level, dragged by banks. The Sensex lost 306.17 points or 1.20 percent to 25310.67 and the Nifty fell 97.40 points or 1.25 percent to 7698.30.
About 541 shares have advanced, 1390 shares declined, and 89 shares are unchanged on the BSE.
10:45 am Global shipping sector woes: China's slower growth and economic transition will pose significant risks for the already struggling shipping sector, rating agency Fitch has cautioned.
"Weaker data on exports and manufacturing in China and its economic transition increase uncertainty for container shipping," a Fitch report said yesterday. China is a key player in global trade, accounting for two-thirds of world iron ore imports, 20 per cent of coal imports and 16 per cent of oil imports.
China's slowing growth will therefore significantly cut demand for shipping services, while oversupply is rife in nearly all shipping segments, state-run Xinhua news agency quoted Fitch report as saying.
The rating firm expected global container demand growth to moderate to between 2 and 4 percent this year, compared to its previous forecast of 4 to 5 percent. Oversupply in the sector sinks shipping prices.
The year-to-date average of the China (Export) Containerised Freight Index, a measure of freight prices, is down 16 per cent year on year. "These pressures will probably lead to bankruptcies among smaller shippers and may drive consolidation," said Fitch.
10:30 am Buzzing: Shares of Elder Pharmaceuticals climbed 3.7 percent intraday Tuesday on proposal of sale of step down overseas subsidiary for debt reduction.
After a discussion on sale of step down overseas subsidiaries in board meeting on September 28, the company said, "It was deliberated that complying with the legal parameters, proposal should be put forward before board of Elder Pharmaceuticals by board of Elder International, FZCO - Dubai for further consideration and necessary approval."
The debt-ridden company has been facing severe financial crunch and is under advance discussions with prospective lenders for funds.
It had total liabilities of around Rs 1,527 crore (including secured and unsecured loans of Rs 753.56 crore) at the end of June 2014. Earlier in December 2013, Elder had raised Rs 2,004 crore by selling its branded domestic formulation business to Torrent Pharma.
It had posted losses in previous five out of six consecutive quarters. It has not yet announced June quarter earnings due to severe shortage of employees to handle work of accounts.
10:15 am FII View: Unless Reserve Bank (RBI) Governor Raghuram Rajan surprises the market with bigger cut than what the street is expecting, it will be difficult to move to a positive zone, says Gautam Chhaochharia of UBS. He strongly feels Nifty will be attractive at 7500 levels.
Chhaochharia expects a 75 bps cut in repo rate in FY16 and is on the same page with the street which is expecting a 25 bps cut today.
Speaking to CNBC-TV18, Chhaochharia said the global situation is quite precarious and India cannot not be affected by it. "Meltdown in China will drive further selling in India," he says.
However, he expects a cyclical recovery to play out next year with falling interest rates acting as the big catalyst. UBS expects FY16 earnings at 8 percent, FY17 at 16 percent. He pegs year-end target for Nifty at 8200.
10:00 am Market Check
Equity benchmarks as well as broader markets remained under pressure ahead of RBI monetary policy. According to a CNBC-TV18 poll, majority of analysts expect 25 basis points rate cut. The market may recover if RBI surprises with 50 basis points rate cut, they feel.
The 30-share BSE Sensex slipped 247.88 points to 25368.96 and the Nifty fell 79.10 points to 7716.60. The BSE Midcap and Smallcap indices declined 1 percent and 0.8 percent, respectively.
The market breadth continued to be in favour of declines with ratio of 491:1185.
Axis Bank and ICICI Bank were the biggest contributors to Sensex fall, down 3 percent each. HDFC Bank, HDFC and State Bank of India dropped 0.7-1 percent.
Vedanta topped the selling list, down more than 4 percent. Hindalco Industries, GAIL, Tata Steel and Bharti Airtel slipped 2-3 percent. However, Infosys, Coal India and BHEL bucked the trend, up marginally.
9:40 am Shree Renuka plunges 4%: Shree Renuka Sugars said today that its Brazilian subsidiary Shree Renuka do Brasil Participacoes (SRDBPL) together with all of its subsidiaries has filed for protection under Judicial Recovery in Sao Paulo court.
SRDBPL has two major subsidiaries in Brazil - Renuka do Brasil S.A. located in the state of Sao Paulo and Renuka Vale do Ivai SA located in the state of Parana.
Renuka Brazil expects the court to authorise it to continue to conduct its business as usual while it devotes efforts to find a long-term sustainable solution for its capital structure.
After acceptance of the request under the Judicial Recovery Law, Renuka Bazil will be under Judicial Protection for 180 days. During this period, the company will have tp present a plan to the Court for approval with the creditors, including Banks, the release says.
9:30 am Global Jitters: Keith Parker, Barclays says global equities fell another 2-3 percent and are closing in on their worst quarter since 2011, as a number of factors further fuelled fears in an already jittery market. According to him, first and foremost factor is that China's August industrial profits plunged 8.8 percent (Y-o-Y), the sharpest contraction in almost four years.
Reports that Saudi Arabia had withdrawn as much as USD 70 billion from global asset managers to plug its budget deficit had a further negative drag, he says.
Glencore plunged 29 percent and materials stocks sold off, while biotech stocks fell another 5 percent and are down 16 percent in a week, leading to further de-risking, Parker feels.
The market has started off trade with a 1 percent fall on Tuesday following weakness in global peers and ahead of much awaited RBI policy. The Sensex fell 280.86 points to 25335.98 and the Nifty plunged 84 points to 7711.70.
Vedanta, ICICI Bank, Tata Steel, Hindalco, Dr Reddy's Labs and Cairn India topped the selling list, down 2-4 percent.
The Indian rupee has opened sharply lower at 66.33 a dollar on Tuesday compared to 66.04 a dollar in previous session following weak global cues and ahead of RBI monetary policy.
Ashutosh Raina, HDFC Bank says the RBI is expected to cut benchmark rates by 25 basis points in the crucial monetary policy meet today. According to him, statements of the RBI Governor Raghuram Rajan will be keenly watched for future cues.
He expects USD-INR pair to trade in Rs 65.50-66.50 a dollar range today.
Global cues too are negative with the US markets having ended lower with the tech-heavy Nasdaq leading losses with 3 percent slump.
European markets too closed about 2 percent lower, pressured by continued concerns about Glencore and Volkswagen. Germany's DAX finished down 2.1 percent, hit hard by the autos. France's CAC ended down around 2.8 percent.
And there seems to be no ending of trouble for Volkswagen. Swiss authorities are considering banning top models like Audi, Skoda and others after the company admitted to rigging emission tests. Former CEO Martin Winterkorn now faces a criminal probe in Germany.
Closer home, the Asian markets have followed weak overnight cues and opened up with sharp cuts. Nikkei hit its lowest level since January 23 amid a broad-based sell-off. The Straits as well is down 1 percent.