Nifty ends below 8400, Sensex sheds 322 points on China woes

09 Dec 2014

Equity benchmarks as well as broader markets shed more than a percent on Tuesday, tracking sharp fall in Chinese markets and further decline in crude oil prices. More profit booking by investors also triggered sell-off in the market.

The 30-share BSE Sensex closed below the psychological 28000-level, down 322.39 points to 27797.01, continuing for the third consecutive session today and hitting a one month low.

The 50-share NSE Nifty slipped way below the 8400-mark (support level, say experts), down 97.55 points to 8340.70. Meanwhile, the BSE Midcap and Smallcap indices shed 1.6 percent each on profit booking.

Experts feel the current fall may be extended by upto 5-6 percent but one should buy on every dip as they are bullish on market.

Sanjay Sinha of Citrus Advisors said the market should have consolidated much earlier. In the absence of a trigger for the bond market, which hinges on a rate cut by Reserve Bank, the market will remain in consolidation phase till third quarter numbers start coming out, he said.

If October-December quarter (Q3) results are better than the previous quarter, and if market sees a burst of liquidity, then it will find momentum which will loftily go ahead till Budget. Real correction, of around 10-15 percent, will happen after Budget, Sinha suggested.

Globally, Asian markets closed lower with the China's Shanghai down 5.4 percent on profit taking amid expectations of weak GDP in 2015 and liquidity fears. Hang Seng lost 2.3 percent following slump on Wall Street last night while European markets like France's CAC, Germany's DAX and Britain's FTSE dropped nearly one percent post Asian rout and further fall in crude oil prices.

Brent crude declined to fresh five-year low of 65.35 a barrel, before showing a recovery (around 15 hours IST) to 66.46 a barrel, up 27 cents.

Back home, all sectoral indices closed in the red. BSE Auto, Bank, Capital Goods, FMCG, Metal and Oil & Gas indices were down 1-3 percent while the fall in Healthcare and IT (down 0.2 percent) was less compared to other indices.

Sesa Sterlite was the biggest loser on the Sensex, down more than 5 percent on China woes. Other metals stocks like Tata Steel and Hindalco Industries were down 3 percent each.

State-run oil explorer ONGC shed over 4 percent to hit a 7-month low Rs 351 as Macquarie lowered target price for the stock to Rs 470 (from Rs 500), largely to factor-in the impact of lower crude price on ONGC Videsh (OVL is unaffected by subsidy, & contributes around 17 percent to ONGC's earnings).

Macquarie downgraded Cairn India to neutral from outperform and also cut its target price by 19 percent to Rs 267 on fall in crude oil prices. The stock declined over a percent.

ITC declined 0.9 percent on account of profit booking as the stock rallied more than 9 percent from last week. Among others, L&T, Tata Motors, ICICI Bank, State Bank of India, Bharti Airtel, NTPC, Wipro, Tata Power and BHEL were down 1-4 percent.

However, Sun Pharma bucked the trend, rising 1.5 percent after the Competition Commission of India cleared Ranbaxy merger deal with some riders. CCI chairman Ashok Chawla said Sun Pharma and Ranbaxy must sell seven brands before deal closure. Ranbaxy gained 3.5 percent. In the pharma space, rival Dr Reddy's Labs rose 1.5 percent.

Utility vehicle maker Mahindra and Mahindra remained in positive terrain throughout the session, up 1.2 percent after brokerage CLSA reiterated buy rating on the stock with a target price of Rs 1,550, citing favourable risk reward ratio.

In the broader space, Jet Airways gained another 6 percent (in addition to 10 percent rally in previous session) as the airline company may get more market share after its rival SpiceJet cancelled 1080 flights till December 31. SpiceJet rebounded 2.6 percent as former director Ajay Singh is confident that the promoter will be able to adequately fund the deficiencies.

Among others, India Cements, IFCI, PFC, HCL Infosystems, UCO Bank, Sintex Industries, Union Bank, Syndicate Bank, IVRCL, Apollo Tyres and Pipavav Defence plunged 4-6 percent while Sun Pharma Advanced Research, Amtek Auto, JM Financial, NCC, Opto circuits and Havells gained 3-4 percent.

Declining shares outnumbered advancing ones by a ratio of 2044 to 907 on the Bombay Stock Exchange while four shares slipped for every share gaining on the National Stock Exchange.

03:30 pm Market closing
Blood spilled on Dalal Street on Asian markets jitters. The Sensex was down 322.39 points or 1.1 percent at 27797.01 and the Nifty slipped 97.55 points or 1.2 percent at 8340.70.
About 919 shares advanced, 2032 shares declined, and 92 shares were unchanged.

Both midcaps and smallcaps were butchered while infra, metals, oil and autos were hammered out of shape.Among the losers were Sesa Sterlite, ONGC, Tata Power, Bharti Airtel and NTPC. Dr Reddy's Labs, M&M, Sun Pharma and HDFC Bank were major gainers in the Sensex.

03:05pm Market Update
The Sensex shed 307.79 points or 1.09 percent to 27811.61 and the Nifty fell 95.15 points or 1.13 percent to 8343.10 while the BSE Midcap and Smallcap indices plunged 1.55 percent each.

Declining shares outnumbered advancing ones by a ratio of 2062 to 810 on the Bombay Stock Exchange.

03:00pm FM says
The government will get an additional Rs 10,500 crore in the current fiscal from hike in excise duty on petrol and diesel.

Finance Minister Arun Jaitley told the Rajya Sabha in a written reply that excise duty hike on November 12 and December 2 will fetch the exchequer Rs 6,000 crore and Rs 4,500 crore respectively in the remaining months of the fiscal, ending March 31, 2015.

The government had raised the excise duty in two tranches on November 12 and December 2 in view of the decline in prices of crude oil in the international market.

02:45pm DQ Entertainment in demand
DQ Entertainment (International ), a global entertainment production and distribution
company focused on children's and family animation content, announced that its holding company and promoter, DQ Entertainment (Mauritius), has executed the documents today to raise funds up to USD 50 million by way of senior secured convertible bonds from OL Master Limited, a private credit fund managed by OCP Asia (Hong Kong).

The stock rallied more than 5 percent.

02:25pm DLF in Focus
With Securities Appellate Tribunal set to hear DLF and its senior executives' plea against Sebi ruling on Wednesday, the focus is likely to be on the accounting practices that were followed by the realty major.

The tribunal, last month, clubbed the petition from DLF's promoters with the company's main plea against Sebi ruling.

In October, the market watchdog had banned DLF, its chairman K P Singh and five other senior officials from the securities market for three years with regard to alleged non-disclosure of three of its hundreds of subsidiaries in the 2007 IPO filing.

Besides Singh, his son and vice-chairman Rajiv Singh, younger daughter and whole-time director Pia Singh, directors T C Goyal and Ramesh Sanka were also banned from securities market by Sebi.

Pertaining to the case, the focus is likely to shift to accounting standards followed by the realty major as the same is a bone of contention with the Securities Exchange and Board
of India (Sebi), sources said, reports PTI.

02:15pm Market Expert
The month of December has not been too kind to Indian equities. The market has lost 2.5 percent from the start of this month.

Deven Choksey, MD, KR Choksey Shares and Securities said that one should use every dip in the market as a buying opportunity.

He expects the Nifty to hover in the broad range of 8,200-8,600 going ahead. Also, he doesn't foresee a major correction in the near-term.

He is bullish on banks especially large public sector lenders. Quality midcaps should also be considered for investing, he added.

02:00pm Market Check
Equity benchmarks remained under pressure following global sell-off. The Sensex tanked 285.77 points or 1.02 percent to 27833.63 and the Nifty lost 85.90 points or 1.02 percent to 8352.35 as Asian markets closed lower with the China's Shanghai down 5.4 percent on profit taking amid expectations of weak GDP in 2015 and liquidity fears.

European markets like France's CAC, Germany's DAX and Britain's FTSE dropped 1 percent each post Asian rout and further fall in crude oil prices. Brent crude declined to fresh five-year lows, down 47 cents to USD 65.72 a barrel.

The loss in broader markets was more than benchmarks; the BSE Midcap and Smallcap indices slipped 1.4 percent each. More than two shares declined for every share advancing on the Bombay Stock Exchange.

State-run oil explorer ONGC hit 7-month low, down nearly 4 percent post fall in oil prices. Cairn India fell nearly 2 percent as brokerage Macquarie downgraded the stock to neutral from outperform on fall in crude oil.

Metal stocks were under pressure post China fall. Sesa Sterlite, JSPL, Hindalco and Tata Steel plunged 2-4 percent.

However, Sun Pharma gained 1.6 percent and Ranbaxy rallied 3 percent after Competition Commission of India clears merger deal with some riders.

Mahindra and Mahindra remained in positive terrain, up nearly a percent after brokerage CLSA reiterated buy rating on the stock with a target price of Rs 1,550, citing favourable risk reward ratio.

Jet Airways gained another 6 percent as the airline company may get more market share after its rival SpiceJet cancelled 1080 flights till December 31.

1:50 pm Market outlook: Speaking to CNBC-TV18, Sanjay Sinha of Citrus Advisors said the market should have consolidated much earlier. In the absence of a trigger for the bond market, which hinges on a rate cut by Reserve Bank, the market will remain in consolidation phase till third quarter numbers start coming out, he said.

From a 6 months perspective, Sinha says oil and sector will see some pessimism as sharp fall in crude prices is bound to throw government's calculations haywire. Beyond that, things should improve with the NDA government dismantling the APM.

1:30 pm Auto sales: Domestic passenger car sales increased 9.52 percent to 1,56,445 units in November as compared with 1,42,849 units in the year-ago month. According to Vikram Kirloskar, President, Society of Indian Automobile Manufacturers (SIAM), there is improvement in April-November production numbers.

The improvement is seen across various categories in the auto sector, he adds. SIAM expects the industry to grow 12-13 percent by FY15 end. However, as per the data by SIAM, exports in the period from April to November were up only 2.79 percent though exports grew 25 percent in November. But overall, across all categories, the growth is 11.74 percent mainly led by two-wheelers and so, there is definitely some improvement in the last few months, adds Kirloskar.

Global jitters grip Dalal Street as the market loses ground with the Nifty seeing almost 1 percent. The 50-share index is down 66.70 points at 8371.55. The Sensex is down 224.18 points at 27895.22. About 895 shares have advanced, 1784 shares declined, and 88 shares are unchanged.

Both midcap and smallcap indices are down over 1 percent each.

Metals, infra, oil and auto stocks drag the indices majorly. Tata Power, Sesa Sterlite, Bharti Airtel, NTPC and ONGC are big laggards in the Sensex. On the gaining side are Sun Pharma, Dr Reddy's Labs, TCS, M&M and Hero Moto.

Chinese markets sink over 5 percent in volatile trade after rallying to a three-and-half-year high earlier in the session. Chinese yuan is set for largest single day loss since 2008. What's leading to the fall in Asian equities is the steep decline in crude prices. Brent continues to trade at 5-year lows on over supply worries.

12:55pm Brent Crude Check
Oil prices plummeted to five-year lows today, pressuring commodity-linked currencies and most Asian shares as a bout of risk aversion rippled through world markets.

The urge for safety gave a rare boost to the Japanese yen which notched up particularly large gains on the beleaguered Australian and New Zealand dollars.

Much of the action was in oil where a glut of supply has seen prices fall for almost six months now, so pressuring energy stocks and commodity-related assets globally.

Brent crude shed 86 cents to USD 65.33 a barrel, while US crude futures lost another 70 cents to USD 62.35. Both had already tumbled more than 4 percent on Monday on expectations that a deepening oil glut would keep prices under pressure into the new year.

Oil prices are likely to remain around USD 65 a barrel for the next six to seven months until the global economy recovers or OPEC changes its production policy, the head of Kuwait's state oil company said, reports Reuters.

12:40pm Market extends losses
The BSE Sensex broke the 28000-mark, down 175.93 points to 27943.47 in afternoon trade led by metals. The NSE Nifty dropped 53.70 points to 8384.55.

About 1059 shares have advanced, 1577 shares declined, and 83 shares are unchanged on the Bombay Stock Exchange.

Metals stocks like Sesa Sterlite, Tata Steel and Hindalco Industries were down 2-4 percent on weak Chinese export data in November.

12:30pm Shanghai sheds over 5%
Shanghai shares lost over 5 percent in volatile trade after rallying to a three-and-half-year high of 3,091 points earlier in the session. Hopes for stimulus from the People's Bank of China (PBoC) had underpinned gains following Monday's dismal reading of November export growth.

"With both exports and imports declining, there are reports suggesting pressure is ramping up on the PBoC to cut the reserve required ratio. Anticipation of further easing is likely to continue driving equities in China higher," said Stan Shamu, market strategist at IG in a note.

Meanwhile, oil prices fell to new five-year lows in the Asian trading session with Brent crude below USD 66 a barrel. Overnight, prices tumbled 4 percent on the back of bearish forecasts, which saw the the Dow post its biggest decline since October, reports cnbc.com.

12:00pm Market Check
Equity benchmarks extended losses in noon trade with the Sensex falling 104.87 points to 28014.53 and the Nifty declining 36.35 points to 8401.90, weighed by metals, capital goods, FMCG, select auto and banks stocks.

The market breadth was negative. About 1120 shares have advanced while 1388 shares declined on the Bombay Stock Exchange.

ITC fell over half a percent on account of profit booking as the stock rallied more than 9 percent from last week. Hindustan Unilever declined over half a percent too.

Shares of Larsen & Toubro, Tata Motors, ONGC, Bharti Airtel, Axis Bank, NTPC, Sesa Sterlite, Tata Power, Cipla, BHEL and Hindalco Industries were down 1-2 percent. However, Sun Pharma topped the buying list, up 1.5 percent after Competition Commission of India approved Ranbaxy merger with some riders.

11:50 am Buzzing: Shares of Sadbhav Engineering (SEL) climbed as much as 4 percent intraday after Kotak Institutional Equities raised target price on the stock to Rs 275 from Rs 230 earlier.

According to the brokerage house, the stock looks attractive as the company's roads portfolio offers a long runway for growth with protection against surprises in traffic and cash flows.

"SEL has a durable roads portfolio, benefiting from long residual life, normalized traffic risk, and well-spread and back-ended debt-repayment schedule (protects on cash flows against business volatility). Stricter norms on overloading can boost toll collections. However, the early stage of portfolio will keep the business in investment mode for another 2-3 years," Kotak explained.

11:30 am Interview: Infosys founders Narayana Murthy and family sold 23.3 percent of their stake on Monday, along with Nandan Nilekani and family - who sold 31.3 percent stake. K Dinesh and family and SD Shibulal too sold 21.5 percent and 9.6 percent, respectively.

Vibhor Singhal of Phillip Capital believes investors are reading too much into promoters selling their stake and yesterday's selling was an over-reaction. However, overall he is bearish on the stock when compared to TCS and Tech Mahindra . He says Vishal Sikka's vision for the company will take time to materialise. In the midcaps space, he likes Persistent Systems.

The market is still dragging with the Sensex down 73.16 points at 28046.24. The Nifty is down 28.10 points at 8410.15. About 1150 shares have advanced, 1081 shares declined, and 101 shares are unchanged.

TCS, Dr Reddy's Labs, Sun Pharma, GAIL and HDFC Bank are top gainers in the Sensex. Among the losers are Tata Power, Sesa Sterlite, Bharti Airtel, NTPC and ITC.

Crude oil futures fell by 1.22 percent to Rs 3,885 per barrel today as speculators engaged in reducing their exposures amid a weakening trend in Asian trade where it tumbled to fresh five-year lows owing to weak demand. Marketmen said trading sentiment remained subdued after crude struck fresh five-year lows in Asia with analysts forecasting further falls owing to weak demand, a global supply glut and fewer production halts.

Globally, Shanghai continues its run and rallies to a fresh 3.5-year high. Brent continues to trade at 5-year low.

10:55am Market Update
The Sensex fell 78.47 points to 28040.93 and the Nifty dropped 26.55 points to 8411.70, weighed down by ITC, Infosys, L&T and HDFC. About 1198 shares have advanced, 1004 shares declined, and 104 shares are unchanged on the Bombay Stock Exchange.

10:50am SpiceJet in demand, up 6%
The Directorate General of Civil Aviation (DGCA) on Monday asked SpiceJet to stop advance bookings of over a month, among other things. SpiceJet former director Ajay Singh says the aviation company must focus on profitable routes, get back to the low-cost model and work hard to bring costs down. He adds that the low-cost carrier holds a 20 percent market share and has a strong promoter. He is confident that the promoter will be able to adequately fund the deficiencies.

As far as the DGCA goes, Singh believes it too is in a difficult situation. It is supposed to protect passengers as well as ensure that the airline remains strong. However, he adds that things could have been handled better. "If an airline is asked not to book beyond a month, it severely impairs the airline," he told CNBC-TV18. He adds that such a move will also adversely impact passengers' confidence in the airline.

Singh is confident that SpiceJet will eventually find a way out of all the problems.

10:30am Market Expert
Lack of supply pressures have kept stocks at elevated levels, says Nilesh Shah, MD and CEO, Axis Capital. He expects divestment to help investors create new positions and feels short-term corrections are healthy for Indian market in ''the long-term''.

Shah, who prefers equities against the fixed income asset class, feels gilt funds are unlikely to outperform equity markets. He expects banking and financial sectors to grow at a faster rate and recommends staying overweight on the sector.

Shah expects earnings growth to pick up in the next 2 years and sees strong demand in Indian markets from international and local investors.

''The market looks to be well supported for next the 3-5 years… We are looking to adopt more bottom-up approach,'' he said.

10:00am Market Check
Equity benchmarks remained in a consolidation mode after a more than one percent fall seen in previous session. The Sensex declined 17.49 points to 28101.91 and the Nifty fell 11.05 points to 8427.20. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.3 percent each.

About 1057 shares have advanced, 797 shares declined, and 87 shares are unchanged on the Bombay Stock Exchange.

Geoff Dennis, UBS said the brokerage upgraded upgrade China and India to overweight within global emerging markets and cut Korea and Taiwan to neutral. "We go into 2015 with an overweight in Asia, as lower oil prices should boost corporate margins," he added.

Metals stocks like Sesa Sterlite, Hindalco Industries and Tata Steel shed around a percent in addition to 2-3 percent fall in previous session. Power stocks namely Tata Power and NTPC, power equipment maker BHEL slipped 1 percent each.

Shares of ITC, HDFC, ONGC, Larsen & Toubro, Tata Motors, Axis Bank and HUL dipped 0.6-1.3 percent whereas TCS, Sun Pharma, ICICI Bank, Infosys, Dr Reddy's Labs, HDFC Bank and Wipro bounced back after yesterday's fall, up 0.5-1.5 percent.

9:50 am FII view: Macro headwinds globally could cause volatility in equity markets, feels Arvind Sanger of Geosphere Capital.

In an interview with CNBC-TV18, he says India was still the brightest spot globally among equity markets. He does not expect the Indian market correcting more than 5-10 percent at worst. He sees the slowdown in China continuing and Europe, Japan being under pressure in 2015. Sanger is bullish on PSU banks selectively even though sentiment for this space is negative right now. He sees some more weakness as PSU banks dilute equity to raise capital, but feels that would be a good opportunity to start accumulating them. He feels PSU banks will do well as interest rates keep falling.

9:35 am Buzzing: Shares of Opto Circuits India gained as much as 3.8 percent intraday Tuesday on hopes of easing in foreign direct investment (FDI) policy for the medical devices sector.

The government is expected to soon take a decision on liberalising foreign direct investment (FDI) policy for the cash-starved medical devices sector.

The proposal to relax the policy was mooted by Commerce and Industry Ministry. The final note was sent to the Cabinet Secretariat and the Union Cabinet is likely to take up the issue this week, sources said. The government is looking at relaxing the policy for the cash-starved medical devices sector so as to attract more investments and boost domestic manufacturing, they added.

The market has opened on a flat note. The Sensex is down 49.13 points at 28070.27 and the Nifty is up 1.05 points at 8439.30. About 313 shares have advanced, 264 shares declined, and 32 shares are unchanged.

Sun Pharma is biggest gainer, up 3 percent in opening trade while Ranbaxy too jumps 3 percent. Wipro, Infosys, TCS and Dr Reddy's are major gainers in the Sensex.

The Indian rupee opened marginally lower at 61.88 per dollar against previous day close of 61.83. The yen held onto sizable gains, having staged a broad short-covering rally as a big drop in oil prices hit global risk appetite.

Ashutosh Raina of HDFC Bank said, "The stupendous US jobs number last week has reinforced fears of the US Federal Reserve hiking rates in mid 2015, the result being dollar gaining against most of the major and EM currencies."

"The USD-INR pair continues to hover around Rs 62/dollar. The second quarter trade deficit has come in at USD 10 billion, which is expected to come down in the third quarter on the back of lower oil prices," he added.

Asian equity markets joined Wall Street's slump after oil markets resumed their downward spiral, pushing Shanghai and Japanese shares off multi-year highs.

US crude extended losses in the Asian trading session, hitting a new five-year low of USD 62.25 a barrel before paring losses. Overnight, prices tumbled 4 percent on the back of bearish forecasts, which saw the Dow post its biggest decline since October. Hong Kong's Hang Seng shed 0.80 percent or 191.29 points at 23,856.38. Japan's Nikkei fell 0.35 percent or 63.34 points at 17,872.30.

South Korea's Seoul Composite slipped 0.31 percent or 6.14 points at 1,972.81. Taiwan's Taiwan Weighted was down 0.47 percent or 43.08 points at 9,144.21. China's Shanghai Composite declined 0.36 percent or 11 points at 3,009.26. Singapore's Straits Times added 0.75 percent or 24.88 points at 3,322.72.

US stocks fell sharply with benchmark indices retreating from records and the energy sector slammed as the price of Nymex crude fell below USD 63 a barrel for the first time since July 2009.