Nifty ends below 8400, Sensex sheds 484 points on China crisis

08 Jul 2015

03:30 pm Market closing: The market fell sharply on Chinese problems. The Sensex ended 483.97 points or 1.7 percent lower at 27687.72 and the Nifty slipped 147.75 points or 1.7 percent at 8363.05. About 944 shares advanced, 1803 shares declined, and 152 shares were unchanged.

Metals and banks were badly hurt with major laggards as Vedanta, Tata Motors, Hindalco, Tata Steel and HDFC. Wipro and HUL were in green.

02:58 pm Market Update: The Sensex fell 392.47 points or 1.39 percent to 27779.22, and the Nifty shed 119.75 points or 1.41 percent to 8391.05. About 951 shares have advanced, 1705 shares declined, and 150 shares are unchanged on the BSE.

02:50 pm Yes Bank's clarification on UBS report: Numbers mentioned in the UBS report are exaggerated as it talks about loan proposals and not necessarily exposures or loan outstanding, Yes Bank's CFO and Senior Group President of Financial Markets, Rajat Monga told CNBC-TV18 adding that the report was never verified with the bank.

Earlier today, UBS released a report mentioning that Yes Bank's exposure to non-performing loans (NPLs) is 19 percent. UBS downgraded its rating from buy to sell and reduced the target price by 26 percent to Rs 740.

Monga said many names mentioned in the list, like the aviation sector and Lanco are not stressed. The bank's exposure to NPLs is nearly half of what is mentioned in the report, he said.

Currently, Yes Bank has negative 38 basis points (bps) of NPAs with excess positioning of 50 bps. The Bank has not added new risks and is not worried about NPAs increasing, Monga said.

The Bank has given 60-80 bps credit cost guidance for FY15-16, Monga said.

02:40 pm Barclays axes CEO: British lender Barclays has ousted Chief Executive Antony Jenkins after three years in the post, saying today it had decided new blood would help accelerate strategic change at the bank and boost shareholder returns.

The surprise move comes weeks after John McFarlane took over as chairman of the bank and signalled his intention to speed up its turnaround plan. McFarlane is to take over executive duties until a permanent successor is appointed.

02:30 pm GST IT contract: The government has started developing IT infrastructures for the goods and services tax (GST) contract. This is expected to be the largest bid from the government's space.

CNBC-TV18 learns that June 30 was the last date to submit the bids wherein 5 major IT players submitted their bids. The bidders include TCS, Infosys, Wipro, HCL and Tech Mahindra. However, other major IT companies like Cognizant, IBM, Capgemini excluded themselves from showing interest in this GST contract bid.

Meanwhile, a working committee has been set up which is analyzing the bids and the winner will be finalized by early August, 2015.

Of the total project amount, 50 percent will be funded by the Centre and remaining by states. However, there is a significant difference in the payment and procurement method from this year onwards. Renewing the entire payment structure, the winner will be paid on 'as-and-when' basis instead of paying over a period of three to five years of laying of the entire IT infrastructure.

02:10 pm Forthcoming tax free bonds: India has permitted seven companies to issue tax-free bonds worth Rs 40,000 crore (USD 6.29 billion) in the current financial year that started in April, according to a government circular seen by Reuters.

The ceiling coupon rate for AAA-rated issuer of tax-free bonds has been fixed at 55 basis points below the government bond yield for retail investors and 80 basis points for other investors, the circular showed.

National Highways Authority of India, Indian Railways Finance Corporation, Housing and Urban Development Corporation, Indian Renewable Energy Development Agency, Power Finance Corporation, Rural Electrification Corporation and NTPC can issue the tax-free bonds, according to the circular.

02:00 pm Market Check
The market remained under pressure following Asian weakness triggered by sell off in Chinese market that lost 5.9 percent (at close). The Sensex fell 418.34 points or 1.48 percent to 27753.35 and the Nifty slipped 128.60 points or 1.51 percent to 8382.20 amidst high volumes. Cash market volumes exceeded Rs 13,000 crore.

The BSE Midcap and Smallcap indices declined 1 percent each. About 782 shares have advanced, 1816 shares declined, and 136 shares are unchanged on the Bombay Stock Exchange.

Shanghai rallied 150 percent in a year before falling 30 percent in last one month. Chinese regulator said markets are in panic mode. In a unprecedented move, more than 40 percent of listed companies voluntarily suspended trading of their shares in the first ten minutes of trade.

Ruchir Sharma of Morgan Stanley told CNBC that there was no fundamental basis for massive rally in China. Market valuations in China need to correct more before they become a buying opportunity, he said.

The currency market succumbed to selling pressure with the rupee falling to 63.61 a dollar against a close of 63.46 a dollar yesterday due to dollar demand and weak local equity markets.

Vedanta topped the selling list, down 8 percent followed by Tata Motors, Tata Steel, Hindalco Industries and HDFC with 3-6 percent loss. However, HUL bucked the trend, up 1 percent as media report indicated that company and Gillette reached settlement over registration of 7 O' Clock trademark.

1:50 pm IT contracts for GST: The government has started developing IT infrastructures for the goods and services tax (GST) contract. This is expected to be the largest bid from the government's space.

CNBC-TV18 learns that June 30 was the last date to submit the bids wherein 5 major IT players submitted their bids. The bidders include TCS, Infosys,Wipro,HCL and Tech Mahindra. However, other major IT companies like Cognizant, IBM, Capgemini excluded themselves from showing interest in this GST contract bid.

Meanwhile, a working committee has been set up which is analyzing the bids and the winner will be finalized by early August, 2015.

1:30 pm Buzzing: Shares of YES Bank slumped 7 percent intraday. UBS has downgraded the stock to sell and slashed target price to Rs 740 from Rs 1000 per share. One of the major concerns that the brokerage points out is the private lender's increased exposure to financially stressed companies, which is up 300 percent in three years. UBS has slashed FY16 and FY17 earnings estimates by 15 percent and 16 percent respectively to factor in higher credit costs of 104 basis points. It expects 13 percent earnings growth in FY16.

The market is continuously falling on China's collapse. The Sensex is down 506.15 points or 1.8 percent at 27665.54, and the Nifty slips 156.25 points or 1.8 percent at 8354.55. About 666 shares have advanced, 1859 shares declined, and 134 shares are unchanged.

HUL, Wipro, ONGC and Hero MotoCorp are top gainers in the Sensex. Among the losers are Vedanta, Tata Motors, Hindalco, Tata Steel and HDFC.

The Nifty is likely to fall to 7800-7900 levels in the near to medium term, says Tirthankar Patnaik, India strategist at Mizuho Bank.

However, from a one to two year perspective, Indian equities will outperform other asset classes and global peers. "Going ahead, we are likely to enter a goldilocks situation with lower fiscal deficit, current account deficit, inflation and commodity bill," he told CNBC-TV18.

He sees meaningful downside in commodity stocks if Nifty heads to 7900. According to Patnaik, the market has been so focussed on Greece that it hasn't yet taken into account what is happening in China. He advises investors to stay away from sectors such as commodities, cement and public sector banks. He is bullish on companies with a global exposure, ex-commodities.

12:58 pm Market Update: The Sensex dropped 478.68 points or 1.70 percent to 27693.01 and the Nifty slipped 148.70 points or 1.75 percent to 8362.10. About 659 shares have advanced, 1829 shares declined, and 133 shares are unchanged on the BSE.

12:50 pm FII View: Broking firm BNP Paribas remains overweight on both India and China. However, it has reduced its Sensex target for 2015 to 30,300 from 33,200.

Speaking to CNBC-TV18, Manishi Raychaudhuri, the firm's MD and Asia Equity Strategist, says a 4-5 percent correction in Indian equities from their recent peaks is not much, considering the turbulence in Europe and China.

He says FIIs are still overweight on India, but not as much as they were 3-4 months back. He says they have reduced their 'overweight' positions by 1-1.5 percent, but are unlikely to reduce it further in the medium term.

He expects further downside in commodity prices, and feels Indian companies, whose earnings are linked to consumption trends in China as well as global commodity prices, could be under pressure.

12:40 pm Global markets update: China's Shanghai Composite index closed 5.9 percent down and Shenzhen index fell 2.5 percent. Hang Seng slipped 7 percent and Nikkei declined 3 percent.

European markets like France's CAC, Germany's DAX and Britain's FTSE outperformed, up 0.3 percent each.

Brent crude dropped over 1 percent to USD 56 a barrel and WTI crude lost 1 percent to USD 51.7 a barrel.

12:30 pm Infosys bags order: Country's second largest IT services firm Infosys has signed a multi-million euro deal with Deutsche Bank.

Under the terms of the multi-year agreement, Infosys will provide services like development, application maintenance, digital and mobility, package implementation and testing services across the Deutsche Bank Group, Infosys said in a statement on Wednesday.

"We look forward to further strengthening our relationship with Deutsche Bank and supporting the bank achieve its goals," Infosys Executive Vice-President and Global Head Financial Services Mohit Joshi said.

The Bengaluru-based firm will also be a strategic partner under Deutsche Bank's Supplier Partnership Programme, it added.

The programme was launched in June 2014 to concentrate the most strategic vendors based on business impact across all categories of the bank, it said.

12:15 pm Market Expert: Nifty is likely to fall to 7800-7900 levels in the near to medium term on China woes, says Tirthankar Patnaik, India strategist at Mizuho Bank. However, from a one to two year perspective, Indian equities will outperform other asset classes and global peers.

"Going ahead, we are likely to enter a goldilocks situation with lower fiscal deficit, current account deficit, inflation and commodity bill," he told CNBC-TV18.

He advises investors to stay away from sectors such as commodities, cement and public sector banks. He is bullish on companies with a global exposure, ex-commodities.

12:00 pm Market Check
The market extended losses in noon trade with the Nifty falling below the 8400 mark, dragged by commodity and banking stocks. The broader markets, too, saw cuts of around 1.6 percent.

The Sensex plunged 483.65 points or 1.72 percent to 27688.04 and the Nifty fell 155.25 points or 1.82 percent to 8355.55. About 618 shares have advanced, 1811 shares declined, and 127 shares are unchanged on the BSE.

Asian markets crashed with trading sentiment hurt by the plunge in Chinese markets. Shanghai index lost 4 percent in an extremely volatile trade where some 1200 stocks halted trading.

Greek drama continued as Eurozone leaders set a deadline for Greece to present fresh proposals and called for an European Union summit on Sunday.

Metal stocks hit hard post sharp fall in base metals globally. CNX Metal index tumbled over 4 percent with stocks like NMDC, Hindalco and Vedanta down anywhere between 4-10 percent.

Bank Nifty fell over 2 percent. Banking heavyweights like HDFC Bank, PNB and Bank of Baroda led declines. Yes Bank plunged 6 percent as brokerage UBS downgraded the bank to a sell from a buy.

Tata Motors dropped more than 7 percent as China's stock market rout raised concerns about further fall in JLR sales. China market accounts for 20 percent of JLR sales.

11:50 am Will China drag India further? Nifty is likely to fall to 7800-7900 levels in the near to medium term on China woes, says Tirthankar Patnaik, India strategist at Mizuho Bank. However, from a one to two year perspective, Indian equities will outperform other asset classes and global peers. "Going ahead, we are likely to enter a goldilocks situation with lower fiscal deficit, current account deficit, inflation and commodity bill," he told CNBC-TV18.

11:45 am Buzzing: Investors are lapping up shares of Crompton Greaves on getting electric motors supply contract from the cement major based in French. The stock rallied 4.4 percent intraday.

"Crompton has signed a global supply agreement with cement major Lafarge for electric motors," said the electrical energy company in its filing to the exchange.

Crompton is going to support Lafarge (which is specialised in three major products: cement, construction aggregates, and concrete) wherever its operations are located.

11:30 am Market outlook: There is no way that India can remain unscathed from the Chinese market fall considering it is the second-largest economy in the world, says Andrew Holland, CEO of Ambit Investment Advisors. However, the Indian markets are awfully complacent at the moment, but are likely to head lower, he says. The fall in commodity prices is likely to impact metal companies and PSU banks in India, he told CNBC-TV18. Holland believes the market will be volatile over the next two weeks due to Greece and China.

After an initial bout of recovery, the market slipped away further with sharp losses. The Sensex is down 405.65 points or 1.4 percent at 27766.04, and the Nifty plunged 131.55 points or 1.6 percent at 8379.25. About 728 shares have advanced, 1449 shares declined, and 123 shares are unchanged.

HUL and Wipro are in green in the Sensex. Vedanta, Tata Motors and Hindalco are down 5-7 percent while Tata Steel and BHEL are other laggards in the Sensex.

Gold prices slipped below Rs 26,000 mark by falling Rs 51 in futures trade on Wednesday after the precious metal plunged to over three-month lows in global market.

Analysts said a weak trend in the overseas markets where gold fell traded near the lowest level since March as a China-led equity-market rout across Asia and the crisis in Greece boosted the dollar, reducing appeal of the precious metal, weighed on its prices at futures trade here.

Asian shares tumbled to a 1 1/2-year low on Wednesday and the safe-haven yen rallied as Chinese stocks struggled to pull out of a tailspin, shaking investors already rattled by Greece's debt crisis.

The drop in China extended a savage correction that has clipped 30 percent off Chinese shares since mid-June, threatening a new blow to the country's already slowing economy despite a slew of market support steps from Beijing.

MSCI's broadest index of Asia-Pacific shares outside Japan wallowed at its lowest level since February 2014, extending its early losses after Chinese shares opened sharply lower. It was last down 2.7 percent.

Japan's Nikkei stock index fell 2 percent to a seven-week low, roiled by both China's dent to regional sentiment and the stronger Japanese currency.

10:58 am Market at day's low: The Sensex plunged 295.23 points or 1.05 percent to 27876.46 and the Nifty declined 95.95 points or 1.13 percent to 8414.85. About 816 shares have advanced, 1323 shares declined, and 127 shares are unchanged on the BSE.

10:40 am Gold Update: Gold prices slipped below Rs 26,000 mark by falling Rs 51 in futures trade today after the precious metal plunged to over three-month lows in global market.

At the Multi Commodity Exchange, gold for delivery in August month contracts fell below the 28,000-mark by falling Rs 51 or 0.20 per cent at Rs 25,981 per 10 grams in a business volume of 400 lots. Also, the metal for delivery in far-month October month was trading Rs 33 or 0.13 per cent down at Rs 26,239 per ten grams in five lots.

Globally, gold was trading lower at USD 1,153.72 an ounce in Singapore today from USD 1,155.26 a day earlier. The metal sank as much as 1.9 per cent yesterday USD 1,148.13, the lowest since March 18.

10:20 am China falls 4%: Chinese stocks dived today after the securities regulator said the tumbling stock market in the world's second-biggest economy was in the grip of "panic sentiment" as investors ignored a battery of support measures from Beijing.

Amid signs of the market freezing up as companies scrambled to have trading in their shares suspended, the People's Bank of China said it was watching closely and would guard against systemic regional financial risks.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 5 percent in early trade, while the Shanghai Composite Index was down 4.3 percent. Both indexes had plunged around 8 percent at the market open.

Around 30 percent has been knocked off the value of Chinese shares since mid-June, and for some global investors the fear that China's market turmoil will destabilise the real economy is now looming as a bigger risk than the euro zone crisis.

10:00 am Market Check
The market trimmed losses in morning trade, supported by short covering in most beaten down stocks in early trade due to China fall. The 30-share BSE Sensex fell 173.61 points or 0.62 percent to 27998.08 and the 50-share NSE Nifty declined 55.70 points or 0.65 percent to 8455.10.

The broader markets outperformed benchmarks, trading flat. About 824 shares have advanced, 1045 shares declined, and 109 shares are unchanged on the Bombay Stock Exchange.

There is no way that India can remain unscathed from the Chinese market fall considering it is the second-largest economy in the world, says Andrew Holland, CEO of Ambit Investment Advisors. However, the Indian markets are awfully complacent at the moment, but are likely to head lower, he says.

The fall in commodity prices is likely to impact metal companies and PSU banks in India, he told CNBC-TV18. Holland believes the market will be volatile over the next two weeks due to Greece and China.

He sees the Nifty trading in 8200-8500 range. Holland says there is no catalyst for Nifty to trade above 8500.

Hindustan Unilever (HUL) bucked the trend, up 1.7 percent. ONGC, Wipro, Cipla and Hero Motocorp gained marginally. However, Tata Motors, Vedanta, Hindalco and Tata Steel topped the selling list, falling 3-5 percent.

9:55 am BRICS Bank: On the eve of the BRICS Summit to be attended by Prime Minister Narendra Modi, Finance Ministers of the five member countries met today, focusing their discussions on the contours and other elements of the BRICS Development Bank. Finance Minister Arun Jaitley participated in the discussions that took place in Moscow.

The meeting, chaired by Russian Finance Minister Anton Siluanov and also attended by China's Lou Jiwei, South Africa's Nhlanhla Nene and Brazil's Joaquim Levy, also discussed recent developments in the world economy, including the economic crisis in Greece.

9:35 am Will China continue to hurt India? Ruchir Sharma, head of emerging markets and global macro, Morgan Stanley Investment Management, says the entire move up that the Chinese market witnessed over the past 12 months had absolutely no fundamental basis. "We've lived through many bubbles in the past and this bubble in China meets all the checklists of a classic mania and a bubble," he says.

According to Sharma, it is the most extreme bubble the market has seen in the last 20-30 years since there was no fundamental basis for this massive rally given the weak state of the Chinese economy and the amount of margin debt which it accumulated in such a short span of time.

The amount of margin debt today in the Chinese stock market is higher than any market in history, he adds.

9:28 am Market check: The market recovers a bit from intial knock out. The Sensex is down 195.44 points or 0.7 percent at 27976.25, and the Nifty slips 65.25 points or 0.8 percent at 8445.55. About 514 shares have advanced, 901 shares declined, and 90 shares are unchanged.

HUL, Cipla and Dr Reddy's Labs are top gainers while Vedanta, Tata Motors, Hindalco, NTPC and Tata Steel.

Chinese market took its toll on Indian market knocking off yesterday's gains, The Sensex is down 256.65 points or 0.9 percent at 27915.04, and the Nifty slips 71.60 points or 0.8 percent at 8439.20. About 173 shares have advanced, 491 shares declined, and 67 shares are unchanged.

Vedanta, Tata Motors, Axis Bank, Hindalco and Lupin are major losers in the Sensex.

China has halted trade in stock markets due to irrational selling. China trading halt leaves 43 percent of entire stock market frozen. China's securities regulator warned there was "panic sentiment" in mainland stocks on Wednesday, saying there had been a surge in "irrational selling" as markets plunged further into bear market territory.

The statement from the China Securities Regulatory Commission (CSRC) did little to soothe investor worries about tumbling equities, with the Shanghai Composite sinking as much as 8 percent in early trade on Wednesday before paring losses to around 5 percent.

Nikkei has fallen most in five years while base metals prices have crashed. Gold fell to a near four-month low overnight while silver sank nearly 7 percent and platinum dropped to a 2009 low, as the dollar rallied. Copper prices hit their lowest level in six years overnight on the dollar gains and on concerns over demand from China. Global cues to watch out today are the Euro zone meeting, FOMC minutes and US earnings season.

Meanwhile, Greek drama drags on as the Greek government has to present a detailed reform proposals to allow a bailout deal by a Sunday summit. Failure to reach a deal would make a "Grexit" more likely. US stocks posted a sharp recovery in the second half of the session to erase earlier losses. At the closing bell, the Dow Jones Industrial Average gained 0.5 percent, the S&P 500 added 0.6 percent and the Nasdaq Composite moved 0.1 percent higher.

European markets closed sharply lower on concerns that Greece's negotiations with its creditors will drag on without a viable debt plan.

Nymex trades above 52 dollars per barrel while Brent holds above the 56 dollar mark. Iran's determination to seal a nuclear deal with global powers to bring more of its crude to an oversupplied market and the restart of a key oil terminal in Libya also weighed on oil prices.