Sensex, Nifty post biggest 1-day percentage loss since June 24
12 September 2016
3:30 pm Closing: Benchmark indices posted their biggest one-day loss in percentage terms since June 24. Broader markets underperformed with the Midcap index positing biggest one fall in six months.
The 30-share BSE Sensex was down 443.71 points or 1.54 percent at 28353.54 and the 50-share NSE Nifty down 151.10 points or 1.70 percent at 8715.60.
The market breadth remained in favour of declines. About three shares fell for every share rising on the Bombay Stock Exchange.
European markets were down 1.5-2 percent on fears of Federal Reserve considering rate hike next week in a policy meeting.
ITC, L&T, Tata Motors, SBI, ICICI Bank and Axis Bank were down 2-4 percent whereas IT outperformed.
3:10 pm Railway Budget to merge with Union Budget?: The finance ministry will shortly circulate a Cabinet note to merge the railway budget with the Union Budget, advance presentation by a month and doing away with Plan and non-Plan expenditure head in the Budget.
The draft note will be floated for inter-ministerial discussion before it is tabled before the Cabinet, which is likely to take up these issues towards the end of this month, sources said.
If the Cabinet agrees to the finance ministry's proposal, the Budget will be presented in January instead of the last working day of February.
The ministry also seeks to end distinction between Plan and non-Plan expenditure and replace it with capital and revenue expenditure.
The finance ministry is seeking approval for these three proposals with an intention to get them implemented in the Budget for 2017-18, the sources said.
3:00 pm Gold Update: Gold prices inched up by Rs 25 to Rs 31,175 per ten grams at the bullion market today on mild buying by jewellers at domestic spot market even as the metal weakened overseas.
Silver, however, fell further by Rs 500 to Rs 45,300 per kg on reduced offtake by industrial units.
Traders said scattered buying by jewellers at domestic spot market led to rise in gold prices but weak trend overseas capped the gain.
Globally, gold fell 0.08 percent to USD 1,326.70 an ounce and silver by 0.47 percent to USD 18.94 an ounce in London in early trade today.
2:48 pm Market near day's low: Equity benchmarks extended fall in last hour of trade with the Sensex down 466.01 points or 1.62 percent at 28331.24 and the Nifty down 157.50 points or 1.78 percent at 8709.20.
About 2017 shares declined against 609 advancing shares on the BSE.
The BSE Midcap and Smallcap indices were down 3 percent and 2 percent, respectively.
2:44 pm HSBC on rupee: Global financial services major HSBC has revised year-end forecast for Indian rupee to 66 from 69, citing "improved domestic backdrop" and said the domestic currency will steadily strengthen against the dollar.
According to HSBC, lower currency volatility has been an important attribute for the rupee and has had the positive effect of boosting confidence and providing a stronger foundation for India to attract long-term investment.
"Considering INR's relatively low volatility, attractive yields and improving fundamentals, the Indian rupee appears to be one of the most attractive carry currencies on a risk adjusted basis," HSBC said.
The rupee is hovering around 66.86 a dollar level.
2:40 pm Buzzing: Cairn India and Vedanta shares fell more than 6 percent ahead of Cairn India shareholders' decision over merger with Vedanta.
2:25 pm Global jitters: European stocks were sharply lower as investor sentiment was rattled by concerns that the US Federal Reserve could be considering an imminent interest rate hike.
The pan-European STOXX 600 was down 1.89 percent.
Asian shares tumbled after major US indices posted their worst drop since the Brexit vote in June on Friday amid concerns central banks will become less accommodative.
Last week, the European Central Bank (ECB) did not take any further easing measures, instead keeping its monetary policy stance unchanged. This disappointed investors in the region.
Global weakness and profit booking dampened the market sentiment with the Sensex falling more than 400 points. The rupee also moved towards 67 a dollar level, down 26 paise to 66.93 on stronger dollar after Federal Reserve officials' statement indicated that the rate hike is likely in a meeting later this month.
The 30-share Sensex was down 407.07 points or 1.41 percent at 28390.18 and the 50-share NSE Nifty down 139.60 points or 1.57 percent at 8727.10. About 1920 shares declined against 669 advancing shares on the BSE.
Four out of Sensex 30 stocks bucked the trend, which are Infosys (1.91 percent), Reliance Industries (0.66 percent), TCS (0.26 percent) and Wipro (0.11 percent). The IT Index gained a percent.
Tata Motors, ITC, L&T, ICICI Bank, SBI, Axis Bank, Adani Ports and M&M were down 2.5-5 percent.
The market will remain shut on Tuesday for Bakri Id holiday.
1:35 pm Transfer of business: Paving the way for stake sale in its commercial finance unit with a loan portfolio of about Rs 16,500 crore, Reliance Capital has got shareholders' approval for the transfer of this business to a separate company.
Post the transfer, Reliance Capital would be applying to the RBI for registering itself as a Core Investment Company (CIC) and this would also facilitate the application of a banking licence, as and when the apex bank's policy permits.
The transfer was approved by an overwhelming majority of 99.99 per cent votes in favour of the scheme of arrangement at the court-convened general shareholders meeting held on September 10, Reliance Capital said in a statement today.
Reliance Nippon Life Insurance and Reliance Nippon Life Asset Management, both subsidiaries of Reliance Capital, already have a strategic partner Nippon Life Insurance - with 49 per cent stake.
1:25 pm Market expert: The Nifty going below 8500 levels will be surprising in case of a prolonged uncertainty on the global front, said Sanjay Sinha, Founder, Citrus Advisors. "If we have this uncertainty evaporating in the short-term somewhere around 8,700 points, we should see the markets take a support and then move up," he added.
The current phase of correction is brining strength in the market and may take the markets higher than the current position, he told CNBC-TV18.
Adding to it, expectations of a double-digit earnings growth in the third and fourth quarter will keep the market going, Sinha said.
1:15 pm GST Council: The Cabinet today cleared the process, formation and functioning of the GST Council, which will decide on the rate of tax under the new indirect taxation regime.
The Council, to be headed by Finance Minister Arun Jaitley and comprising of representative of all 29 states and two union territories, will have to be set up by November 11.
It will decide on the tax rate, exemptions and threshold limits in the new indirect tax regime, which is expected to kick in from April 1, 2017.
The government has notified September 12, as the date from which the procedure for setting up of the GST Council will be initiated and which will be completed within 60 days.
1:00 pm Market check:
Equity benchmarks fell more than a percent in afternoon trade as Federal Reserve officials' comments on rate hike spooked markets globally.
The 30-share BSE Sensex was down 364.09 points or 1.26 percent at 28433.16 and the 50-share NSE Nifty declined 123.45 points or 1.39 percent to 8743.25.
European stocks were sharply lower as investor sentiment was rattled by concerns that the US Federal Reserve could be considering an imminent interest rate hike. The pan-European STOXX 600 was down 1.89 percent.
Crude prices fell a percent after US oil drillers added rigs to look for new production as producers adapt to cheaper crude, with speculators cutting positions betting on further price rises.
Brent crude futures were trading at USD 47.54 per barrel, down 1 percent, from their last settlement. US West Texas Intermediate futures were down 1.31 percent, at USD 45.28 a barrel.
12:53 pm Earnings Poll: Tata Steel's first quarter profit is seen falling 61.7 percent to Rs 292 crore and revenue declining 3.9 percent to Rs 29,110 crore compared to year-ago period, according to average of estimates of analysts polled by CNBC-TV18.
In base quarter (Q1FY16), profit was supported by other income of Rs 762 crore.
However, operational performance is likely to be strong with operating profit rising 6 percent to Rs 2,940 crore and margin expanding 90 basis points to 10.1 percent on yearly basis.
Analysts expect more focus on domestic business and UK asset sales progress.
12:45 pm Europe opens: European stocks opened sharply lower as investor sentiments is rattled by concerns that the US Federal Reserve could be considering an imminent interest rate hike.
The pan-European STOXX 600 was down 1.36 percent.
Meanwhile, Asian shares tumbled on Monday after major US indices posted their worst drop since Brexit on Friday amid concerns central banks will become less accommodative.
12:35 pm Cairn EGM today: Cairn India's extraordinary general meeting (EGM) will be held later today where Cairn shareholders will vote on the Vedanta merger.
Anil Agarwal led-Vedanta Group needs over 50 percent of minority shareholders of Cairn India to vote in the favour of this deal. Cairn Energy Plc and Mondrian's vote, at this moment, is counted crucial to make the more than 50 percent consent.
The US based invetsment manager Mondrian Investment Partners holds 3.76 percent and these two (Cairn India Plc) are among the three largest minority shareholders of Cairn India.
The other heavyweight minority shareholder, LIC, with a 9 percent stake, is also likely to vote in favour of merger. Cairn Energy Plc owns 9.8 percent stake in Cairn India
Under the revised merger terms, Cairn India shareholders will get one share of Vedanta and 4 preferential shares.
12:20 pm 3 IPOs in September: To tap the upbeat investor sentiment, three firms - ICICI Prudential Life Insurance Company, L&T Technology Services and GNA Axles - will hit the markets this month to raise over Rs 7,000 crore through IPO.
Bidding for shares in L&T Technology Services will open on September 12, while the same for GNA Axles would begin on September 14 and ICICI Prudential Life's public issue would be open for subscription from September 19.
The public issue of ICICI Prudential Life is expected to garner Rs 6,057 crore, L&T Technology (Rs 894 crore) and GNA Axles (Rs 130 crore).
12:00 pm Market Check
Equity benchmarks continued to fall on account of weakness in global peers. Hong Kong's Hang Seng and China's Shanghai extended downtrend, falling 2-3 percent.
The Sensex was down 386.70 points or 1.34 percent to 28410.55 and the Nifty fell 129.25 points or 1.46 percent to 8737.45. The BSE Midcap plunged 2.2 percent on weak market breadth.
About three shares declined for every shares rising on the exchange.
Global markets are dealing with the fear of inaction from the European Central Bank and a hawkish tone from the US Federal Reserve. Last week, ECB chief Mario Draghi decided to leave rates on hold, but investors are bracing for an interest rate increase by the Fed in December.
The real risk to the markets is that valuations in the US and emerging markets are not justifiable, Arvind Sanger, Managing Partner, Geosphere Capital Management, told CNBC-TV18.
11:45 am IPO: Incorporated in 2012, L&T Technology Services (LTS), a leading global pure-play in the growing ER&D services company, has opened its public issue today.
LTS operates in five diverse industry segments viz. transportation, industrial products, telecom and hi-tech, process industry and medical devices.
The company aims to raise around Rs 894 crore through an offer for sale of shares (at a price band of Rs 850-860 per share).
ICICIdirect has recommended that investors avoid the issue.
"LTS is a one of the leading players in the growing ER&D space. However, LTS is available at 15.5x FY18 EPS, which is at premium to other IT players who have a presence in the ER&D space such as HCL Tech (12.3x FY18E EPS) and Cyient Technologies (11.9x FY18E EPS). Hence, we believe current valuations leave limited upside," it reasoned.
11:30 am USFDA nod: Glenmark today announced receipt of final approval from US health regulator for its generic version of AstraZeneca's Xylocaine ointment.
The approval given by the US Food & Drug Administration (USFDA) to Glenmark Pharmaceuticals Inc USA (Glenmark) is for Lidocaine Ointment USP, 5 per cent, the company said in a statement.
Citing IMS Health sales data for the 12 month period ending July 2016, the company said Xylocaine Ointment, 5 per cent achieved annual sales of approximately USD 373.0 million.
Glenmark's current portfolio consists of 109 products authorised for distribution in the US and 62 ANDA's pending approval with the US FDA.
11:15 am Oil falls further: Crude prices fell over 1 percent after US oil drillers added rigs to look for new production as producers adapt to cheaper crude, with speculators cutting positions betting on further price rises.
Brent crude futures were trading at USD 47.35 per barrel, down 1.37 percent, from their last settlement. US West Texas Intermediate futures were down 1.59 percent, at USD 45.15 a barrel.
Traders said the price falls on Monday and Friday were a result of increasing oil drilling activity in the United States, which indicated that producers can operate profitably around current levels.
11:00 am Market Check
The sell-off continued in morning trade on negative lead from global peers as investors feel the central banks will become less accommodative. They maintained caution ahead of Federal Reserve's policy meeting due next week.
The Sensex slipped 416.52 points or 1.45 percent to 28380.73 and the Nifty dropped 134.60 points or 1.52 percent to 8732.10, dragged by banks, auto, FMCG, metals and infra stocks. However, technology stocks played defensive role with the IT index rising nearly a percent.
The market breadth also gradually improved. More than three shares declined for every share rising on the exchange against the earlier ratio of 6:1. The BSE Midcap plunged 2 percent and Smallcap lost 1.5 percent.
10:40 am Market outlook: CNBC-TV18's Consulting Editor Udayan Mukherjee said that the market got too complacent globally which lead to a jolt last week.
''Because yields were hardening, markets got a jolt,'' he said, adding that it was overdue.
He sees one of two scenarios playing out in the next one or two months. Very soon, in the next few days leading up to the US Fed meet, one can expect soothing comments, and there could be a short correction lasting 5-7 days, he said.
The second scenario or Plan B is there could be some dislocation in the markets and it in turn could lead to a more savage selloff in emerging markets of which one saw the first signs on Friday, he said. ''In that case, we are looking at lower levels of 7900.''
Udayan said instead of getting into a predictive scenario, one should try and follow the liquidity. ''Volatility index becomes a key thing right now.''
10:20 am Inflation expectations: India's consumer inflation is expected to have eased to a four-month low in August, helped by smaller rises in food prices, but it likely remains too high for a rate cut next month when the central bank's new governor presents his first policy review.
Consumer prices, which the Reserve Bank of India tracks as it sets interest rate policy, likely rose 5.5 percent in August, according to a Reuters poll of economists, compared with an increase of 6.07 percent in July.
Data on the consumer price index and industrial output will be released at 1200 GMT Monday.
Economists predict annual growth in industrial output decelerated to 1.7 percent in July from June's eight-month high of 2.1 percent.
Even if retail inflation eases as much as anticipated, it will still be above the RBI's March 2017 target of 5 percent, despite low global crude prices.
10:00 am Market Check
The market remained under pressure in morning trade, though it recovered a bit from day's low. All sectoral indices except IT slipped into red.
The 30-share BSE Sensex was down 398.34 points or 1.38 percent at 28398.91 and the 50-share NSE Nifty fell 129.10 points or 1.46 percent to 8737.60. About four shares declined for every share advancing on the BSE.
Infosys outperformed, extending gains further. The stock was up over a percent whereas ICICI Bank, HDFC, Tata Motors, Axis Bank, ITC, L&T and SBI were top contributors to Sensex's fall, down 1-3 percent.
Global markets fell sharply amid concerns central banks will become less accomodative and as investors cautious ahead of Federal Reserve's policy meeting next week.
Andrew Sheets of Morgan Stanley said the brokerage house thought the risks of a Fed rate hike this year are manageable, and would be more concerned that the European Central Bank disappointed dovish expectations.
Sheets continued to expect developed markets and China growth to disappoint, with the rest of emerging markets doing relatively better.
9:50 am Buzzing: Shares price of Lanco Infratech, Siyaram Silk Mills, Jaiprakash Associates and Man Industries declined 4-11 percent intraday on the back of poor numbers declared by the companies for the quarter ended June 2016.
Jaiprakash Associates' Q1 net loss widened to Rs 603 crore versus loss of Rs 482.4 crore, in the same quarter last fiscal. Siyaram Silk Mills' Q1 net profit was down 22.5 percent at Rs 10 crore and its EBITDA was down 3.9 percent at Rs 29.8 crore.
Lanco's consolidated Q1 net loss increased to Rs 448.9 crore versus loss of Rs 316.3 crore, while the company's EBITDA was up 52.7 percent at Rs 484.6 crore.
9:35 am FII View: Nigel Tupper of Bank of America Merrill Lynch says the positive trend in the Global Wave coupled with attractive valuations on cyclicals and funds' underweight positioning on cyclical sectors combine to create a supportive environment for equities and cyclicals.
Pullbacks in equities and cyclicals are buying opportunities, according to him.
9:25 am Market Update: Equity benchmarks made a mild recovery from opening lows due to short covering and buying on dips. The Sensex lost 391.76 points or 1.36 percent to 28405.49.
The Nifty fell 127 points or 1.43 percent to 8739.70. More than five shares declined for every share advancing on the BSE.
9:20 am FPI investment: Foreign investors have pumped in nearly Rs 6,800 crore (USD 1 billion) into the country's capital markets so far this month, driven by global and domestic factors.
The latest infusion comes on top of a whopping inflow of Rs 25,904 in the preceding two months (July-August). Prior to that, foreign portfolio investors (FPIs) had pulled out a total of Rs 4,373 crore from the capital markets (equity and debt) in June and July.
Experts attributed the latest flurry in inflow to factors including good and widespread monsoon, better corporate earnings, sound progress on rollout progress of the Goods and Services Tax (GST), and positive data coming from the US economy.
9:15 am Market Check
Equity benchmarks started off the week with sharp cut, tracking steep fall in global peers. The Sensex was down 522.91 points or 1.82 percent at 28274.34 and the Nifty down 160.25 points or 1.81 percent at 8706.45.
ICICI Bank and Tata Motors were the biggest losers, down 3-4 percent followed by HDFC, ITC, Axis Bank, L&T and SBI whereas Infosys bucked the trend.
The Indian rupee slipped in the early trade. It has opned lower by 20 paise at 66.88 per dollar versus 66.68 Friday.
Pramit Brahmbhatt of Veracity said he expected the rupee to trade with a negative bias under pressure from global sentiment. The trading range for the day is seen between 66.50-67/dollar, he feels.
The dollar began the week on the back foot as a bout of risk aversion underpinned the yen, though the US currency garnered some support on renewed talk of a possible rate hike by the Federal Reserve as early as this month.
Asian shares tumbled after a sharply lower finish for major US indexes on Friday amid concerns central banks will become less accomodative. Shanghai, Hang Seng and Nikkei were down 1.5-2.7 percent.
The Dow Jones industrial average closed nearly 400 points lower on Friday, with 3M and Boeing contributing the most losses. The index also posted its biggest single day fall since June 24 and its worst week since January.