Sensex sinks 286 points, Nifty ends below 7500 on global weakness
02 February 2016
Equity benchmarks as well as broader markets crashed more than 1 percent amid late sell-off on Tuesday, following correction in global peers and oil prices. Oil & gas, metals, auto and banks stocks saw selling pressure.
The 30-share BSE Sensex fell 285.83 points or 1.15 percent to 24,539 and the 50-share NSE Nifty tanked 100.40 points or 1.33 percent to 7455.55. The BSE Midcap and Smallcap indices were down 1.7 percent and 1.3 percent, respectively. More than two shares declined for every share advancing on the Bombay Stock Exchange.
Vibhav Kapoor, IL&FS says this will be a year of global developments and that the market will be more influenced by global factors than domestic ones.
According to him, it does not appear as though global markets have discounted developments like Fed stance on interest rates, strengthening of dollar, falling crude and now the Presidential elections in the US.
On the global front, European markets were trading sharply lower as concerns over oil prices returned to haunt markets. France's CAC, Germany's DAX and Britain's FTSE were down 1.4-2 percent (at 16 hours IST). Asian markets ended mixed with the Shanghai up 2.3 percent.
Oil prices fell, dented by worries about the demand outlook and rising supply, while hopes for a deal between OPEC and Russia on output cuts faded. Brent crude and US oil plunged more than 3 percent.
Back home, RBI's sixth bio-monthly monetary policy was a non-event for the market as the central bank maintained repo rate and cash reserve ratio unchanged, saying CPI inflation is expected to be around 6 percent by March 2017.
ICICI Bank lost another 3 percent, in addition to 5.6 percent correction in previous session on asset quality concerns. Axis Bank and SBI were down 2 percent each.
Sun Pharma plunged 4 percent despite launch of generic version of cancer drug Gleevec in US and getting US FDA approval for Buprenorphine Hydrochloride (that is used to treat opioid dependence). Cipla was also saw selling pressure, down 4 percent while Lupin gained 0.3 percent post launch of generic Glumetza (anti-diabetic drug) HCI ER tablets in US.
Bajaj Auto gained 1.5 percent after reporting a 2 percent increase in January sales at 2.93 lakh units on yearly basis.
Among others, Tata Motors, ONGC, Adani Ports, NTPC, Tata Steel, Coal India, BHEL and Hindalco Industries plunged 3-7 percent while Bharti Airtel gained 2 percent.
3:30 pm Market closing: Dragged by European markets, the Sensex ended down 285.83 points or 1.1 percent at 24539. The Nifty closed down 100.40 points or 1.3 percent at 7455.55. About 859 shares advanced, 1839 shares declined, and 109 shares were unchanged.
Tata Steel, NTPC, BHEL, Hindalco and Cipla were major losers while Bharti Airtel, Bajaj Auto, Lupin and Wipro were gainers in the Sensex.
2:58 pm Market falls further: The Sensex dropped 173.63 points or 0.70 percent to 24651.20 and the Nifty fell 60.35 points or 0.80 percent to 7495.60.
About two shares declined for every share advancing on the BSE.
2:40 pm Gold Update: Rising for the third straight day, gold today advanced by Rs 115 to trade at over three-month high of Rs 27,300 per ten grams on persistent buying by jewellers to meet the wedding season demand, amid a firming trend overseas.
Besides, a weak rupee against the dollar that made the imports costlier, supported the upside in gold prices. However, silver eased by Rs 60 to Rs 34,870 per kg due to reduced offtake by industrial units and coin makers.
Bullion traders said apart from a firming global trend where gold soared to a three-month high, pick-up in buying by jewellers to meet the ongoing wedding season demand mainly upped the sentiment here.
2:20 pm Earnings: Home textile company Welspun India 's third quarter consolidated profit increased 21 percent year-on-year to Rs 174.08 crore, aided by revenue, operating profit and lower finance cost.
Revenue rose 10.7 percent to Rs 1,490.4 crore in quarter ended December 2015 compared to Rs 1,346 crore in year-ago period, driven by higher volumes across products, higher mix of innovative products and favourable exchange movement.
The company said domestic retail sales continued to witness robust growth and year-to-date growth stood at 52 percent.
Operating profit (earnings before interest, tax, depreciation and amortisation) grew by 17.8 percent year-on-year to Rs 400.5 crore and margin expanded by 200 basis points to 27 percent, mainly on account of higher share of innovative and branded products.
2:00 pm Market Check: The market extended losses amid volatility in afternoon trade, weighed down by banks, oil, metals and select pharma & infra stocks. The Sensex declined 122.60 points to 24702.23 and the Nifty fell 55.65 points to 7500.30.
The market breadth was also weak as about 1,546 shares declined against 948 advancing shares on the BSE.
Tata Steel topped selling list on Sensex, down 6.5 percent followed by Cipla (down 5 percent). ICICI Bank, Sun Pharma, Axis Bank, ONGC, Adani Ports, NTPC, BHEL and Hindalco Industries were down 2-4 percent.
European markets extended losses as concerns over oil prices returned to haunt markets. The pan-European STOXX 600 was down 1.2 percent.
There was mixed trade in Asia and another tumble in oil prices on Monday as hopes faded of a possible deal between OPEC and non-OPEC nations to cut production amid a glut in global oil supply. Brent and US West Texas Intermediate (WTI) were both sharply lower.
1:55 pm Govt spending: With private investment failing to pick up and monsoon playing truant on agriculture production, Finance Minister Arun Jaitley today favoured increasing public spending to boost the economic growth.
India has been growing by 7-7.5 percent, and for the country to accelerate, all sectors have to contribute, he said at the MGNREGA Sammelan-2016 here.
"Bad monsoon of last two years has resulted in rural spending going down. In such a situation, the government needs to come forward. Government must increase its spending. The pace of public spending has increased," Jaitley said.
1:45 pm Result: Mumbai-based real estate company Godrej Properties' third quarter profit increased 10.2 percent to Rs 52 crore compared to Rs 47.2 crore in year-ago period despite sharp fall in revenue. Bottomline was supported by operational performance.
Revenue declined 18.7 percent to Rs 422.3 crore in quarter ended December 2015 compared to Rs 519.3 crore in same period last year.
Operating profit (earnings before interest, tax, depreciation and amortisation) surged 25 percent year-on-year to Rs 80.1 crore and margin expanded by 660 basis points to 18.9 percent in Q3, driven by lower cost of sales.
1:30 pm Car sales: Domestic car sales in 2016 began on a subdued note, with market leader Maruti Suzuki posting a marginal increase in January and the likes of Hyundai, Ford and Mahindra & Mahindra reporting a single-digit growth. The home-grown auto major Tata Motors and Honda Cars India saw their domestic sales dip in January even as the industry tries to build momentum for the year, with the Auto Expo just round the corner. Maruti Suzuki India said its domestic sales increased marginally by 0.8 percent to 1,06,383 units as against 1,05,559 in January 2015.
The market is still volatile with the Nifty below 7550. The 50-share index is down 17.40 points or 0.2 percent at 7538.55. The Sensex is down 31.30 points or 0.1 percent at 24793.53. About 1156 shares have advanced, 1278 shares declined, and 119 shares are unchanged.
Bharti Airtel, Bajaj Auto, Infosys, TCS and Lupin are top gainers and Tata Steel, NTPC, Cipla, Sun Pharma and BHEL are losers in the Sensex.
RBI's target to bring down retail inflation at 5 percent by March 2017 will face some risks from monsoon uncertainty and execution of 7th Pay Panel recommendations, while macro-economic factors will be critical for sustaining growth, Moody's Investors Service said today.
It also said that a growth-oriented forthcoming Budget, while controlling inflation at the same time, will help support India's sovereign credit rating. The Reserve Bank expects retail inflation to be around 6 percent in January 2016 and lower further to 5 percent by March 2017.
European markets traded lower as concerns over oil prices returned to haunt markets. There was mixed trade in Asia and another tumble in oil prices on Monday as hopes faded of a possible deal between OPEC and non-OPEC nations to cut production amid a glut in global oil supply.
12:58 pm Market Update: Equity benchmarks continued to be volatile in afternoon trade after maintaining status quo in policy by RBI.
The Sensex rose 23.61 points to 24848.44 and the Nifty was up 0.05 points to 7556.
12:40 pm Asia Update: Asia markets closed mostly lower, weighed by declines in the energy sector as oil prices continued to tumble.
Japan's Nikkei 225 lost 114.55 points, or 0.64 percent, to close down at 17,750.68, while South Korea's Kospi slipped 18.22 points, or 0.95 percent, to 1,906.60.
Down Under, the ASX 200 fell 50.28 points, or 1 percent, to 4,993.30, extending declines after the Reserve Bank of Australia's (RBA) decision to keep interest rates on hold at a record low of 2 percent. The energy sector saw the biggest loss, slipping 3.24 percent, following extended losses in oil prices.
12:20 pm Earnings: Mumbai-based real estate company Godrej Properties' third quarter profit increased 10.2 percent to Rs 52 crore compared to Rs 47.2 crore in year-ago period despite sharp fall in revenue. Bottomline was supported by operational performance.
Revenue declined 18.7 percent to Rs 422.3 crore in quarter ended December 2015 compared to Rs 519.3 crore in same period last year.
Operating profit (earnings before interest, tax, depreciation and amortisation) surged 25 percent year-on-year to Rs 80.1 crore and margin expanded by 660 basis points to 18.9 percent in quarter gone by.
12:00 pm Market Check: The market recouped morning losses with the Sensex rising 93.16 points to 24917.99 and the Nifty up 17.25 points to 7573.20. Banks and technology stocks supported the market while oil stocks dragged.
The market breadth was marginally positive as about 1176 shares advanced against 1091 declining shares on the BSE.
As expected by economists, the Reserve Bank of India (RBI) today left the key repo rate unchanged at 6.75 percent, saying it would want to wait for more inflation data and the Union Budget before taking action, even as it said it would continue to remain "accommodative".
It also left the cash reserve ratio and statutory liquidity ratio unchanged, despite concerns that liquidity is tight in the system.
Infosys, L&T, SBI, Axis Bank, Lupin, Bharti Airtel, Dr Reddy's Labs and Bajaj Auto gained 1-2.5 percent while ONGC, Tata Steel, NTPC and Coal India were down 1-3 percent.
11:55 am Rural India: Prime Minister Narendra Modi held a late night meeting with food and farm officials last week to address falling agricultural output and rising prices, and traders warn the country will soon be a net buyer of some key commodities for the first time in years.
Back-to-back droughts, the lack of long-term investment in agriculture and increasing demands from a growing population are undermining the country's bid to be self-sufficient in food.
That is creating opportunities for foreign suppliers in generally weak commodity markets, but is a headache for Modi, who needs the farm sector to pick up in order to spur economic growth and keep his political ambitions on track.
11:45 am Interview: Abidali Neemuchwala, who took over as Wipro chief executive officer (CEO), said the ambition to double the size and touch revenues of USD 15 billion with an operating margin of 23 percent in four years is a goal 'grounded in reality.' In an e-mail to employees, he said the company must begin to think like a start-up and also create a workplace that is a 'melting pot' of diverse ideas. He went on to say, "My confidence stems from a multitude of factors - our rich heritage of technology, innovation, desire to excel and the unlimited potential of what we can achieve together."
11:30 am RBI monetary policy: For 2016-17, growth is expected to strengthen gradually, notwithstanding significant headwinds. Expectations of a normal monsoon after two consecutive years of rainfall deficiency, the large positive terms of trade gain, improving real incomes of households and lower input costs of firms should contribute to strengthening the growth momentum. Yet, still weak domestic private investment demand in a phase of balance sheet adjustments, re-emergence of concerns relating to stalled projects, excess capacity in industry, sluggish external demand conditions dampening export growth could act as headwinds.
11:20 am Market check: The Sensex is down 80.75 points or 0.3 percent at 24744.08, and the Nifty is down 35.80 points or 0.5 percent at 7520.15.
About 1011 shares have advanced, 1141 shares declined, and 105 shares are unchanged.
11:10 am RBI policy: With unfavourable base effects on the ebb and benign prices of fruits and vegetables and crude oil, the January 2016 target of 6 percent should be met. Going forward, under the assumption of a normal monsoon and the current level of international crude oil prices and exchange rates, inflation is expected to be inertial and be around 5 per cent by the end of fiscal 2016-17. However, the implementation of the VII Central Pay Commission award, which has not been factored into these projections, will impart upward momentum to this trajectory for a period of one to two years. The Reserve Bank will adjust the forecast path as and when more clarity emerges on the timing of implementation.
11:05 am Market check: The Sensex is down 34.73 points or 0.1 percent at 24790.10, and the Nifty down 19.25 points or 0.25% at 7536.70. About 1072 shares have advanced, 1010 shares declined, and 91 shares are unchanged.
In its sixth bi-monthly monetary policy review, the Reserve Bank of India has kept key rates unchanged. This is the last announcement before the upcoming Annual Budget, which will be presented on February 29. As per CNBC-TV18 poll, the market was expecting in a no-action policy from RBI chief Raghuram Rajan.
The central bank has kept cash reserve ratio (CRR) of scheduled banks unchanged at 4 percent. Consequently, the reverse repo rate under the LAF will remain unchanged at 5.75 percent, and the marginal standing facility (MSF) rate and the bank rate at 7.75 percent.
The Sensex is down 16.24 points at 24808.59 and the Nifty is up 5.45 points or 0.07 percent at 7561.40. About 1099 shares have advanced, 965 shares declined, and 97 shares are unchanged.
Tata Steel, ONGC, NTPC, BHEL and Reliance are major losers in the Sensex. Among losers are Bharti Airtel, Dr Reddy's Labs, Bajaj Auto, Infosys and TCS are gainers in the Sensex.
Meanwhile, oil prices fell for a second session in Asian trade as worries about top energy consumer China and rising oil supply weighed on markets, although possible talks between OPEC and Russia on production cuts offered some support.
Gold edged to a three-month high as weak global manufacturing activity underscored the challenges for the world economy, pushing investors towards safe-haven assets. Increased volatility in other assets has benefitted gold and it could see more gains as global central banks may be forced into easing monetary policy further this year to spur growth.
10:40 am Market Expert: The ongoing rally is more of a technical pullback after a steep fall, Vibhav Kapoor, Group CIO, IL&FS tells CNBC-TV18.
Kapoor says this will be a year of global developments and that the market will be more influenced by global factors than domestic ones.
He says it does not appear as though global markets have discounted developments like Fed stance on interest rates, strengthening of dollar, falling crude and now the Presidential elections in the US.
10:20 am Earnings estimates: Shree Cement's third quarter profit is likely to jump 33 percent year-on-year to Rs 125 crore and revenue is seen rising 17 percent to Rs 1,810 crore, according to average of estimates of analysts polled by CNBC-TV18.
Operating profit in Q3 may increased 33 percent Rs 407 crore and margin may expand 270 basis points to 22.5 percent compared to year-ago period.
Volume growth is likely to be at 21 percent year-on-year led by capacity addition in Bihar and Chhattisgarh.
10:00 am Market Check
The market continued to consolidate ahead of RBI policy. The Sensex rose 46.71 points to 24871.54 and the Nifty advanced 7.70 points to 7563.65. The market breadth was positive as nearly two shares advanced for every share declining on the Bombay Stock Exchange.
The Reserve Bank of India is unlikely to take any interest rate action at the monetary policy meeting today. The market seems to have factored in a no-action policy from RBI chief Raghuram Rajan at the bi-monthly meet, according to a CNBC-TV18 poll of economists. The RBI is also likely to maintain the word 'accommodative policy' in its monetary policy statement.
Tata Steel, ONGC, Coal India, GAIL, BHEL, Vedanta, Cairn India and Tech Mahindra were down 1-3 percent while Bharti Airtel, Dr Reddy's Labs, Lupin, Bajaj Auto, Infosys and Power Grid Corporation gained 1-2 percent.
Oil prices fell for a second session in Asian trade today as worries about top energy consumer China and rising oil supply weighed on markets, although possible talks between OPEC and Russia on production cuts offered some support. Brent for April delivery dropped 64 cents to USD 33.60 a barrel while the front month contract for West Texas Intermediate (WTI) was down 77 cents at USD 30.85 a barrel.
9:45 am FII view: Laurence Balanco, CLSA feels the Nifty is staging a rebound rally with initial resistance at 7,717 followed by major trend resistance at the 200-DMA and upper boundary of the cited downtrend channel at the 8,156-8,160 area.
According to him, globally relief rallies continued to unfold, but should ultimately fade.
"The markets are looking for some additional rally attempts this week prior to a resumption of the long-term decline in February," Balanco says, adding he continued to recommend selling this rebound.
9:30 am RBI poll: The Reserve Bank of India is unlikely to take any interest rate action at the monetary policy meeting tomorrow. The market seems to have factored in a no-action policy from RBI chief Raghuram Rajan at the bi-monthly meet, according to a CNBC-TV18 poll of economists. The RBI is also likely to maintain the word 'accommodative policy' in its monetary policy statement. As far as the quantum of rate cuts in this entire calendar year is concerned, 60 percent of respondents believe that there will only be one 25 bps rate cut in the entire calendar and the remaining 40 percent are divided between a 50 bps and 75 bps rate cut from the governor.
The market has opened flat ahead of Reserve Bank of India's monetary policy review. The Sensex is up 42.63 points or 0.2 percent at 24867.46, and the Nifty is up 6.40 points or 0.08 percent at 7562.35. About 452 shares have advanced, 253 shares declined, and 32 shares are unchanged.
ONGC, GAIL, HDFC, Bajaj Auto and ITC are major losers while Adani Ports, Sun Pharma, Tata Motors, Dr Reddy's Labs and Maruti are gainers in early trade.
The Indian rupee opened flat at 67.85 per dollar against previous close of 67.84.
The dollar extended its rebound against the yen to a fifth straight day after Wall Street reversed nearly all its earlier losses allowing USD/JPY to hold onto 121 and close with a slim gain.
The dollar was lower against all the other G-10 currencies, however, as disappointing US economic data coupled with comments from Fed Vice Chairman Stanley Fischer indicated interest rates will remain unchanged through the March FOMC meeting.
Asian shares wobbled as crude oil prices slid on rekindled oversupply fears and after downbeat manufacturing data raised concerns about global momentum.
Global manufacturing expansion accelerated slightly but remained weak at the start of 2016 as faster growth in developed markets failed to offset a contraction in emerging economies.
The Dow Jones industrial average was down 17.12 points, or 0.1 percent, to 16,449.18, the S&P 500 had lost 0.86 points, or 0.04 percent, to 1,939.38 and the Nasdaq Composite had added 6.41 points, or 0.14 percent, to 4,620.37.