Sensex plunges 806 points, Nifty ends tad below 10,600

The rupee collapsed to a fresh low of 73.82 intraday against the US dollar amid rising global oil prices, deepening concerns about the current account deficit and capital outflows. The currency fell 24 paise to close at 73.58 a dollar today and depreciated 15.5 percent year-to-date, effectively becoming the worst performing Asian currency.

HPCL, BPCL and IOC were biggest losers among Nifty50 stocks, falling more than 11 percent after Finance Minister Arun Jaitley said the government cut excise duty on petrol & diesel by Rs 1.50 per litre. "Oil marketing companies will absorb Re 1 per litre w.r.t petrol & diesel prices."

Reliance Industries (6.87 percent) and Eicher Motors (5.71 percent) were other losers while ICICI Bank bucked the trend, rising 4.21 percent followed by Axis Bank (up 2.45 percent), UltraTechCement (2.16 percent), Bharti Infratel (1.77 percent) and Yes Bank (up 1.06 percent).

Benchmark indices closed sharply lower on Wednesday with the Sensex losing 806.47 points or 2.24 percent to 35,169.16 as all sectoral indices ended in the red.

The 50-share NSE Nifty plunged 259 points or 2.39 percent to 10,599.30. More than two shares declined for every share rising on the BSE.

Tata Motors' subsidiary Jaguar Land Rover sold 19,874 units in UK in September, down 2.6 percent compared to 20,403 units sold in same month last year.

Jaguar sales increased 2.1 percent year-on-year to 7,047 units while Land Rover sales slipped 3.8 percent to 12,827 units in month gone by.

Benchmark indices recovered a bit from day's low with the Sensex trading down 642.37 points or 1.79 percent at 35,333.26.

The 50-share NSE Nifty declined 202.00 points or 1.86 percent to 10,656.30.

The Indian rupee also recovered from its day's low to trade at 73.59 against the US dollar, down 25 paise from previous close of 73.34 a dollar. The currency hit record low of 73.82 on consistent dollar demand.

In the today's market correction, more than Rs 2.5 lakh crore worth of investors' wealth eroded.

The Market Capitalisation of BSE companies declined to Rs 1,41,02,145.98 crore on October 4 from Rs 1,43,71,351.05 crore on October 3, at 14:50 hours IST.

“Whenever liquidity is tight, interest rates are heading up it is bound to have some negative effect on the asset class. As a consequence of that, earnings do get downgraded eventually,” Anup Maheshwari, joint CEO & CIO at IIFL Asset Management Company told CNBC-TV18

"However, these kind of corrections are good in terms of longer term profile of asset class and an opportunity for investors. One will have to make some changes in portfolios," he added.

Talking about expectations from the monetary policy tomorrow, Maheshwari said, "Consensus belief is for 25 basis points hike and market is not likely to take too much cue from the rate hike because it is clear where it is headed directionally. So 25 or 50 basis points will not make much of difference." 

BSE, NSE To Suspend Trading In Moser Baer From Oct 11

Leading stock exchanges BSE and NSE have decided to suspend trading in the equity shares of Moser Baer India, a manufacturer of CDs and DVDs, from October 11 following the commencement of liquidation proceedings. The move comes after Delhi Bench of National Company Law Tribunal (NCLT) through an order on September 20 had initiated liquidation process against Moser Bear. It had also appointed Resolution Professional Anil Kohli as the liquidator. "To avoid market complications, trading in the equity shares of Moser Bear India will be suspended with effect from Thursday, October 11, 2018," BSE said in circular. In a separate circular, National Stock Exchange (NSE) also announced the similar move. Source: PTI

The Sensex & Nifty has fallen sharply on the back of selling witnessed across all Asian markets.

"Since most Asian markets are importers of crude the impact of rising crude prices and rising Dollar Index will weigh on their Trade Balance. Amongst Asian markets India is the highest importer of crude after China hence the impact on India’s Trade Deficit is very high," Rusmik Oza, Senior VP (Head of Fundamental Research) of Kotak Securities said.

FPIs are selling in emerging markets which is visible in India also. Nifty has broken the 200 DMA placed at 10,777, which has intensified the selling from market participants. Also, heavy weights like Reliance and few more stocks that had led the last 1,200 points rally in Nifty from 10,500 to 11,700 are the ones that are correction sharply hence the impact is higher in today’s fall.

"If Nifty sustain below the 200 DMA for more than a week then the floor can shift to 10,000 on the downside," he said.

The rupee plumbed record lows as global oil prices rose and stocks and bonds weakened, heightening speculation that the Reserve Bank of India (RBI) may hike interest rates on Friday more aggressively than earlier expected.

A majority of analysts polled by Reuters last week expected a third consecutive 25 basis point increase in the key repo  rate, currently set at 6.50 percent, though speculation has mounted in recent days that the RBI could opt for a 50 bps hike.

"Expectations are building for an aggressive rate response, but the policy committee's inflation mandate and the current benign trend, backs the case for a measured 25 bps rate hike," Radhika Rao, an economist at DBS wrote in a note on Thursday. Source: Reuters.  

The bank said Board of Directors accepted the request of Chanda Kochhar (MD and CEO) to seek early retirement from the Bank at the earliest.

The bank further said the enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome of the enquiry.

Kochhar will also relinquish office from the board of directors of the bank's subsidiaries.

The board decided to appoint Sandeep Bakhshi as Managing Director & Chief Executive Officer. His appointment will be for a period of five years until October 3, 2023, subject to regulatory and other approvals.

Separately, due to health reasons MD Mallya, Independent Director, resigned from the board and the same was accepted, ICICI Bank said.  

Mercator said its total production of coal for the month of September 2018 stands at 183,485 MT, which is record production level from the present mines.

With this, the company has already achieved around 50 percent of its annual coal production guidance of approximately 2 million MT for FY19.

Additionally, the company has focused its efforts on higher production and Infrastructure throughput volumes going forward, it said.

Mercator has also surpassed its total internal monthly target with a record dispatch number of 378,312 MT through its coal handling infrastructure in September, including 3rd party dispatches.

Concerned over the spike in fuel prices, Finance Minister Arun Jaitley met Oil Minister Dharmendra Pradhan to look at options to mitigate its impact on the economy, sources aware of the discussion said.

The two ministers met last evening amid concerns of high fuel prices adding to farmers' distress, particularly in the upcoming Rabi crops season, sources said.

Diesel, which is being sold at record high prices, is the most used fuel in the farm sector. Tractors tilling the soil to irrigation pump sets - all use diesel, and a spike in its prices is bound to add to the cost cost of farming.

The two ministers are believed to have discussed options to mitigate the impact of rising international oil prices and rupee dipping to new lows. Source: PTI

Nitasha Shankar, Senior Vice President and Head of Research at YES Securities (I) said IIndian Markets have been seeing a sharp sell off on account of depreciation in rupee and higher crude prices.

This negative sentiment was further reinforced by the fear of liquidity crisis to support credit growth following the IL&FS scare, she added.

She believes that the long term story of Indian Markets remains intact.

Therefore this fall should be treated as an opportunity to accumulate fundamentally strong companies where valuations have corrected to attractive levels, Nitasha advised. 

The food company said board of directors approved allotment of 58,14,000 number of warrants having attached thereto the right to convert into equal number of equity shares, to the promoters.

Board also approved allotment of 18,30,000 number of equity shares at Rs 76 per share amounting to Rs 13.9 crore pursuant to conversion of warrants into equal number of equity shares to the promoters (Jugal Kishore Arora, Satnam Arora and Gurnam Arora).

Share price of Shriram Transport Finance Corporation added 4 percent intraday as global research house UBS has maintained buy rating on stock with a target price of Rs 1,550, implying potential upside of 44 percent.

According to firm, the termination of SVL guarantee is a key positive. Recent liquidity crisis to hurt growth in Q3 but long-term impact is limited.

This is a preferred pick among NBFCs and expect re-rating driven by strong EPS growth, it said.

Onward Technologies, an independent engineering design solutions and services company, said in continuation of positive revenue & bottom line growth and performance of the company over the last 9 quarters, personal guarantee of the promoters & asset owned by the promoter family holding company has been released by the bank.

The company feels it is on track to meet its target towards net zero debt goal in the next 18 months. "The overall DSO of the company has also shows positive improvement over the last 12 months & we expect continuous improvement quarter on quarter."

Nomura said Q2 is likely to be a seasonally stronger quarter with constant currency (CC) revenue growth of 2.8 percent QoQ and 8.8 percent YoY for Tier 1 IT (including Cognizant). "Cross-currency impacts would range from 30-100bps with Top 5 Indian IT players at the higher end, while players like Hexaware/Mphasis would have lower impacts."

On revenue growth, TCS is likely to lead with 3.9 percent QoQ, followed by HCL Technologies at 2.9 percent QoQ (1.5 percent QoQ organic), Infosys at 2.8 percent QoQ, Tech Mahindra at 1.8 percent QoQ, with Wipro lagging at 1.4 percent QoQ, in CC terms, the research house said.

It expects Infosys/HCL Technologies to retain growth guidance at 6-8/9.5-11.5 percent YoY in CC terms, Cognizant to raise lower end of guidance to 9-10 percent (versus 8.4-10 percent YoY earlier) and Wipro to guide for 1-3 percent QoQ (around 1 percent incremental contribution from Alight).

INR depreciation benefits on margins is likely; but sustenance is key, Nomura feels.

Crude Oil Update: Oil prices dipped from four-year highs reached the previous session, pressured by rising US inventories and after sources said Russia and Saudi Arabia struck a private deal in September to raise crude output.

Brent crude oil futures were trading at $86.09 per barrel, down 0.23 percent, from their last close.

Brent on Wednesday hit a four-year high of $86.74 a barrel, lifted by expectations of a tightening market ahead of US sanctions that will target Iran's oil exports from next month.

US West Texas Intermediate (WTI) crude futures were down 0.27 percent, at $76.20 a barrel.

US crude oil stocks rose by nearly 8 million barrels last week to about 404 million barrels, the biggest increase since March 2017, Energy Information Administration data showed on Wednesday. Source: Reuters.

Gross direct tax collection in the first six months of the financial year grew 16.7 percent to Rs 5.47 lakh crore, Finance Ministry said Thursday.

Refunds amounting to Rs 1.03 lakh crore have been issued during April 2018 to September 2018, which is 30.4 per cent higher than refunds issued during the same period in the preceding year.

Net collections (after adjusting for refunds) have increased by 14 per cent to Rs 4.44 lakh crore during April, 2018 to September, 2018. Source: PTI

Oil traders have piled into wagers that US crude oil could surge to $100 a barrel by next year, a milestone that until recently many considered unthinkable due to record US production growth and relatively flat global demand.

But the imminent return of US sanctions on Iran and bottlenecks keeping US oil from getting to market have fueled a rally that has taken benchmark oil prices to four-year highs.

While big producing nations say supply is ample, hedge funds and speculators are increasingly skeptical of that argument, betting the market could rally further as sanctions on Iran's crude exports return on November 4. Source: Reuters.

International Finance Corporation (IFC) moved an insolvency plea against infrastructure firm Punj Lloyd before the National Company Law Tribunal (NCLT). A two-member principal bench headed by President Justice M M Kumar has issued notices to Punj Lloyd and Punj Lloyd Upstream Ltd.

The tribunal has directed both the petitions to list on October 9, when it would hear similar matter in which leading private sector lender ICICI Bank has filed insolvency plea against Punj Lloyd.

IFC is seeking recovery of USD 30 million defaulted by Punj Lloyd.

Earlier in June, ICICI Bank had approached NCLT to recover Rs 830 crore of outstanding loans to Punj Lloyd. However, majority of its lender including SBI are against and had opposed ICICI's insolvency plea.

Nelco said its subsidiary Tatanet Services and India’s fastest growing VSAT (Very Small Aperture Terminal) service provider, has successfully established satellite based connectivity solution in collaboration with Vistara, India’s full service carrier, for connecting the airline’s airport setup in Leh, Ladakh.

The lack of a stable connectivity in Leh impacts enterprise business applications significantly, affecting customer experience and impairing smooth functioning of the overall business. A reliable connection is imperative as it enables to scale bandwidth as and when required to provide a seamless experience.

Gainers and Losers

Reliance Industries and Eicher Motors were the biggest losers among Nifty50 stocks, sinking 6.5 percent each.

HDFC Bank, TCS, Infosys, HDFC, ITC, Bajaj Finance, HUL, ICICI Bank, Bajaj Finserv and IndusInd Bank were down 1-4 percent while L&T, Bharti Infratel and Yes Bank gained more than 1 percent.

Mindtree said the meeting of the board of directors of the company will be held on October 17, 2018, to consider the audited financial results for the quarter and half year ended September 2018 and also to consider the declaration of interim dividend, if any, amongst other matters.

The midcap IT company has fixed record date as October 26 for payment of dividend, if approved.

The company will also hold earnings call for Investors /Analysts on October 17 to discuss the financial results for the quarter ended September 2018.

Ajay Srivastava of Dimensions Corporate Financial Services told CNBC-TV18 that he has disappointed with auto sales data announced for September.

After the crude hit four-year high and rupee touched record low, he said he is relooking at growth estimates. "We don't think India will grow at 6.7-7 percent in real terms."

The Sensex corrected more than 3,500 points from its record high due to macro factors.

He said he is not looking at buying stocks right now but technology stocks are in the best place right now given US exposure as in current rupee fall, exporters will be beneficial.

Margin call and profit booking has been leading to further fall in midcaps, he feels.

Bears are not loosening their grip on Dalal Street as the benchmark indices remained under heavy selling pressure on macro factors like weakening rupee and rising crude oil prices.

The 30-share BSE Sensex fell 632.82 points or 1.76 percent to 35,342.81 and the 50-share NSE Nifty slipped 198.40 points or 1.83 percent to 10,659.90. About three shares declined for every share rising on the BSE.

Telecom Disputes Settlement & Appellate Tribunal (TDSAT) granted relief to the company. Spectrum trading to be completed without bank guarantee of Rs 2,900 crore and company to receive Rs 975 crore from sale of spectrum.

Company to pay Ericsson Rs 550 crore and RITL minority investors Rs 230 crore from spectrum trading.

Gold prices fell by 0.07 percent  to Rs 31,340 per ten gram in futures trading Thursday as participants trimmed their positions to book profit amid a weak trend overseas, reported PTI.

At the Multi Commodity Exchange, gold for delivery in far-month December declined by Rs 23, or 0.07 percent to Rs 31,340 per ten gram in a business turnover of 361 lots.

Jindal Steel and Power (JSPL) said it has posted its highest ever domestic quarterly steel production and sales in Q2 FY19. "The company recorded a crude steel production of 1.3 MT (million tonne) and robust sales of 1.27 MT during the quarter July-September 2018."

Its quarterly steel production saw a 46 percent growth during the quarter, while the quarterly steel sales traced a steeper curve by recording a rise of 53 percent on a year-on-year basis. The quarterly production and sales in Q2 of previous fiscal stood at 0.89 MT and 0.83 MT respectively.

“The superlative production and sales performance is a result of the recently commissioned 3.25 MTPA Basic Oxygen Furnace (BOF) at JSPL’s 6 MTPA integrated steel plant at Angul, Odisha," NA Ansari, CEO – JSPL said.

"Steel production and sales are generally lower during Q2 due to the monsoons. We are looking at enhancing the growth curve during Q3 and Q4 in order to set new records during this fiscal," he added.

India’s service sector continued to expand during September, but at a marginal rate amid reports of underwhelming market demand. Price pressures intensified, with higher fuel costs and a stronger US dollar raising the price of imported goods.

Expectations remained in positive territory, whilst firms added to their staffing levels for a thirteenth successive month as part of efforts to keep on top of workloads.

The seasonally adjusted Nikkei India Services Business Activity Index recorded 50.9 during September. That was down from 51.5 in August and the lowest reading in the current four-month sequence of rising activity.

Weaker growth in the service sector was closely linked by panellists to a broad stagnation of new business. Companies reported that market conditions were underwhelming amid a lack of demand at a time of generally higher prices, reports Nikkei IHS Markit.

Bears further tightened their grip on Dalal Street as the 30-share BSE Sensex plunged 652.03 points or 1.81 percent to 35,323.60 as investors worried about trade deficit due to consistent rise in crude oil prices and fall in rupee.

The 50-share NSE Nifty slipped 200.30 points or 1.84 percent to 10,658. About three shares declined for every share rising on the BSE.

Inderjeet Bhatia of Macquarie said meetings with North American investors suggest a lack of confidence in the near term due to macro headwinds. "Reduction in US-China rhetoric could lead to another round of underperformance."

The research house recommended switching from expensive defensives in India to cheaper cyclical names, he said.

Macquarie has a positive outlook on IT, industrials, autos, cement and real estate; while it is negative on consumer, pharma and NBFCs. It has a neutral stance on private banks, energy, metals, media and utilities. Source: CNBC-TV18.

Laurence Balanco of CLSA said with the daily momentum indicator having confirmed the recent low, any relief rally from here is likely to be short-lived.

He sees further weakness and a probable break below the 200-DMA and move down to next support at the 9,960-10,000 area.

In US dollar terms, he said the I-Shares MSCI India ETF has broken down from a 2017-2018 topping pattern, which projects a 14-15 percent downside. Bajaj Auto is a sell candidate, he advised. Source: CNBC-TV18.

The rupee collapsed to a fresh low of 73.77 against the US dollar, as global oil prices continued to rise, deepening concerns about the current account deficit and capital outflows.

Consistent dollar demand from importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.

Meanwhile, state-owned oil marketing companies have been allowed to raise USD 10 billion from overseas market to meet their working capital needs.

At the interbank foreign exchange, the rupee opened lower and slipped further to a fresh low of 73.77 a dollar against 73.34, a fall of 43 paise.

The international benchmark Brent crude breached the $86 per barrel level, near its four-year high.

From September, Nomura expected global wholesale volume growth trajectory for Jaguar Land Rover to improve.

Currently the brokerage house has factored in 4 percent growth in overall JLR volumes in FY19. "Healthy orderbook for I-Pace & XE’s ramp-up in China should lead to a better second half of FY19."

Nomura has maintained Buy call on the stock with a target price at Rs 356 per share.

Benchmark indices continued to reel under selling pressure with the Sensex falling 465.63 points or 1.29 percent to 35,510 on the back of crude oil prices hitting multi-year highs and rupee touching record lows.

The 50-share NSE Nifty slipped 140.80 points or 1.30 percent to 10,717.50. About 2.5 shares declined for every share rising on the BSE.

All sectoral indices traded in the red barring metals which have been rising for last couple of sessions due to rising commodity prices in international markets.

Nifty Bank, Auto, Financial Service, IT and Realty indices were down more than 1 percent.

Broader markets also caught in bear trap as the Nifty Midcap and Smallcap indices declined over a percent.

Mortgage lender HDFC said it earned Rs 787 crore from selling stake in the initial public offer (IPO) of HDFC Asset Management Company.

During the September quarter, the proceeds from the stake sale in the IPO of HDFC Asset Management Company after "net of expenses and tax stood at Rs 787 crore", it said in a filing to the stock exchanges.

According to the filing, income from dividend for the September quarter was Rs 6 crore compared to Rs 537 crore in the corresponding quarter. The latter amount included Rs 433 crore from HDFC Bank.

In the current year, dividend from HDFC Bank amounting to Rs 511 crore was received in the first quarter of the financial year, as per the filing, reports PTI.

Gainers and Losers: Index heavyweights Reliance Industries, HDFC, TCS, HDFC Bank and Infosys fell 1-3 percent. Bajaj Finance, IOC, ICICI Bank, Eicher Motors, M&M, Maruti Suzuki and Bajaj Finserv slipped 2-4 percent.

Only two stocks were trading in the green. L&T gained 1.8 percent and Hindalco rose 0.3 percent.

Market Opening: Bears kept tight control on Dalal Street as the market cracked further in opening on Thursday, with the Sensex falling 518.42 points to 35,457.21.

The 50-share NSE Nifty fell 155.10 points to 10,703.20. The market breadth weakened further as about four shares declined for every share rising on the BSE.

Brent oil prices trade lower: Oil prices on Thursday fell from four-year highs reached the previous session, pressured by rising US inventories and after sources said Russia and Saudi Arabia struck a private deal in September to raise crude output.

Brent crude oil futures were trading at USD 85.85 per barrel, down 44 cents, or 0.5 percent, from their last close. Brent on Wednesday hit a four-year high of USD 86.74 a barrel, reported Reuters

Rupee at record low: The rupee plunged by 43 paise to breach the historic low of 73 level as soaring crude oil prices fuelled worries over capital outflows and widening current account deficit.

The domestic currency closed at a record low of 73.34, down by 43 paise or 0.59 percent at the interbank foreign exchange here.

In the day trade, the rupee crashed to its all-time low of 73.42 per dollar as crude oil prices breached the $85 per barrel mark, leading to huge outflows of cash

Dollar scales 11-month peak: The dollar climbed an 11-month top on the yen on Thursday as stunningly strong US economic data drove Treasury yields to their highest since mid-2011, while Japanese stocks attempted to re-claim a 27-year peak, reported Reuters.

Higher US yields are anything but favorable for emerging markets, however, as they tend to draw away much-needed foreign funds while pressuring local currencies.

The dollar took off after an influential survey of the US services sector showed activity at its strongest since August 1997, sparking speculation the payrolls report on Friday could also surprise.

Wall Street ends with marginal gains: Wall Street advanced on Wednesday and the Dow Jones Industrial Average closed at a record for a second day, after US economic data fuelled a rise in Treasury yields, lifting financial stocks, reported Reuters.

The ADP National Employment Report showed private payrolls jumped by 2,30,000 jobs in September, the largest gain since February. A report from the Institute for Supply Management showed services sector activity hit a 21-year high in September.

The Dow Jones Industrial Average rose 54.45 points, or 0.2 percent, to 26,828.39, the S&P 500 gained 2.08 points, or 0.07 percent, to 2,925.51 and the Nasdaq Composite added 25.54 points, or 0.32 percent, to 8,025.09.