Mayhem on D-Street: Sensex crashes 806 points; Nifty plummets to 10,599

Domestic markets plunged over 2.5 per cent on Thursday on the back of weak rupee, boiling crude prices, rising bond yields, FII outflows and negative global cues.

The S&P BSE Sensex ended the session lower by 806.47 points or 2.24 per cent at 35,169.16 and the Nifty50 down 259 points or 2.39 per cent at 10,599.25. Intraday, the Sensex crashed 953.51 points to 35,022.21 against the previous close of 35,975.63 and Nifty slumped 305.55 points to 10,552.70 against 10,858.25.

Sensex gainers, losers

 

The rupee slumped to a record low of 73.81 as global crude prices jumped to a four-year high of $86 per barrel yesterday. Weakening of rupee to a new low has heightened speculation that the RBI may hike interest rates more aggressively than expected on Friday.

BSE sectoral indices

 

 

“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.

The fall in the rupee also led to a sharp rise in government bond yields, due to increasing expectations that the RBI's monetary policy committee could go for a bigger rate increase than expected on Friday.

“Markets are in a panic right now, they are probably pricing in more rate hikes than what the MPC can deliver,” a senior debt trader at a private bank said.

With speculation growing for steeper interest rate rises, the benchmark 10-year bond yield rose as much as 10 basis points to 8.21 percent, not far from 8.23 per cent hit in late September which was the highest since November 2014.

A rise in US Treasury yields to their highest levels since mid-2011 pulled global bond yields higher across the board and boosted the dollar, while stocks sagged in response.

MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.7 per cent, with South Korea, the Philippines, Indonesia and Taiwan all down.

Even the Nikkei eased 0.3 per cent, as rising yields offset the boost to exporters from a weaker yen. EMini futures for the S&P 500 also lost 0.4 percent in Asian trade, while European stocks opened down 0.6 percent.

European markets

 

European shares fell in early trade, led by defensive stocks, while banks tracked gains by their US peers after strong data lifted Treasury yields to their highest since mid-2011. The pan-European STOXX 600 benchmark index was down 0.5 per cent by 0726 GMT. Germany's DAX also declined 0.5 per cent and the UK's FTSE fell 0.6 per cent. Read more

Bullion prices

 

Gold prices rallied by Rs 70 to Rs 32,100 per 10 gram at the bullion market on the back of sustained buying by local jewellers amid firm global cues. However, silver eased by Rs 50 to Rs 39,350 per kg due to reduced offtake by industrial units and coin makers. Read more

RBI may hike repo rate

 

The Reserve Bank of India is expected to raise rates for a third time since June on Friday to combat inflationary pressures as it grapples with a weakening rupee, surging oil prices and market instability sparked by a major non-bank finance firm's defaults. Read more

Trading to be suspended in Moser Baer

 

BSE and NSE have decided to suspend trading in the equity shares of Moser Baer India from October 11 following the commencement of liquidation proceedings. The move comes after the Delhi Bench of NCLT through an order on September 20 had initiated liquidation process against Moser Bear. Read more

Hathway Cable hits over 3-month high

 

Shares of Hathway Cable and Datacom Ltd climbed as much as 6.3 per cent to Rs 29.50, their highest since June 22 as RIL is in talks to buy the company. Read more

Pre-close trade

The S&P BSE Sensex recovered slightly from intraday low of 35,063.13 but was still trading trading lower by 625.11 points or 1.74 per cent at 35,350.52. Similarly, the Nifty recovered from 10,575.55 but was still down 186.35 points or 1.72 per cent at 10,671.90.

Weak rupee, which touched intraday low of 73.81, boiling crude oil prices (Brent crude touched a four-year high of $86), rising bond yields, heavy FII outflows and negative global cues owing to rising US Treasury yields and strong economic data spooked investor sentiment.

With speculation growing for steeper interest rate hike by RBI, the benchmark 10-year bond yield rose as much as 10 basis points to 8.21 per cent, not far from 8.23 per cent hit in late September which was the highest since November 2014.

Major Sensex losers were Reliance, TCS, Hero MotoCorp, Sun Pharma and Adani Ports, while the top five gainers were ICICI Bank, Axis Bank, L&T, YES Bank and M&M.

Barring capital goods, all other BSE sectoral indices were in the red.

 

 

World food prices slip

 

World food prices slipped in September from the month before, with only sugar posting a rise. The Food and Agriculture Organization's food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 165.4 points last month, against a marginally revised 167.7 in August. Read more

RCom to get Rs 13,000 cr from RJio

 

Reliance Communications expects to receive ₹13,000 crore in the final tranche of payment from Reliance Jio Infocomm (RJio) in the next few days, enabling it to completely exit the debt-restructuring process. RCom shares were trading up 1.95 per cent at Rs 12.03 on the BSE.

Chanda Kochhar quits ICICI Bank

 

ICICI Bank Chairman and Managing Director Chanda Kochhar, who has been in the midst of allegations of corporate misconduct and quid pro quo in certain loans, has opted for early retirement. The shares jumped as much as 5.7 per cent to Rs 320.90 on the BSE. Read more

IDBI Bank allots shares to LIC

 

IDBI Bank has allotted about 33.99 crore equity shares to Life Insurance Corporation of India (LIC) at a price of ₹61.73 per share (inclusive of premium amount of ₹51.73 per share) aggregating up to ₹2,098.19 crore through preferential issue. Read more

Nifty 50 October Futures (10,633)

 

As long as the contract trades below 10,700, the near term view is bearish. Traders can sell the contract with a stop-loss at 10,710. But strong rallies beyond 10,700 could witness a corrective up-move and take the contract northwards to 10,730 and 10,750 levels. Key supports are at 10,635 and 10,600. Click here to read more

Domestic markets crashed heavily on Thursday with the benchmark indices falling over 2.5 per cent on the back of weak rupee, boiling crude oil prices and weak global cues. Hardening bond yields are also creating panic in the domestic markets.

The Sensex crashed over 856.93 points or 2.38 per cent to 35,118.70 points and the Nifty plunged 253.55 points or 2.34 per cent to 10,604.70. Volatility index India VIX also surged 6 per cent. The Sensex had lost nearly 550 points on Wednesday.

Investors also remained extremely cautious ahead of RBI monetary policy outcome on Friday.

The rupee collapsed to a new low of 73.81 as the dollar reached a 11-month high against the yen on upbeat US data and hawkish comments from Fed. On Wednesday, Brent crude jumped to a four-year high of $86 per barrel. 10-year bond yield was hovering above 8.18 per cent on Thursday against the previous close of 8.11 per cent.   

All sectoral indices were trading in the red, with IT, auto, pharma, banking and realty stocks witnessing most losses.

 

 

Major Sensex losers were Hero MotoCorp, Reliance, Sun Pharma, Adani Ports and TCS, while the only four gainers were L&T, YES Bank, Tata Steel and Vedanta.

 

According to analysts, benchmark indices have fallen nearly 10 per cent from the peak levels attained in August due to weak domestic sentiment, global uncertainty, weak rupee and rising crude oil prices. With rupee and crude oil showing no signs of stability, weakness is likely to continue in the coming sessions, they said.

Brokers said volatility was seen in most Asian markets as high US Treasury yields and good economic data led to fears that investors would move to the US.

SEBI employees up in arms

 

SEBI employees came out of their offices on Wednesday to protest for the second time in the past four days against the regulators’ internal policy on staff promotion. SEBI employees say the regulator had short-changed its own staff in the name of implementing better career progression. Click here to read more

Russia, Saudi Arabia to raise oil output

 

Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices and informed the United States before a meeting in Algiers with other producers. US President Donald Trump has blamed OPEC for high crude prices and called on it to boost output to bring down fuel costs before the US congressional elections on November 6. Read more

Direct tax mop-up

 

The Finance Ministry on Thursday announced that the direct tax collection has reached ₹5.47 lakh crore during the first six months of the current fiscal. This is 16.7 per cent higher than corresponding period of previous fiscal. Direct tax comprises Personal Income Tax (PIT), Corporate Income Tax (CIT) and Securities Transaction Tax (STT). Read more

Domestic shares and bonds weakened, while the rupee slumped to a record low of 73.81 as global oil prices rose, heightening speculation that the central bank may hike interest rates on Friday more aggressively than earlier expected.

The Sensex was trading lower by 690.45 points or 1.92 per cent at 35,285.18 and the Nifty down 210.1 points or 1.93 per cent at 10,648.15.

The partially convertible rupee hit a life low of 73.82 per dollar before recovering slightly to 73.74/75 by 0545 GMT. It had closed at 73.3350 on Wednesday.

One forex dealer at a foreign bank, who asked not to be named, said early intervention by the central bank stopped the rupee from hitting 74 per dollar.

The benchmark 10-year bond yield was 9 basis points higher at 8.20 per cent, not far from 8.23 percent hit in late September, which was the highest since November 2014.

MCX gold, silver

 

Gold prices fell 0.07 per cent to Rs 31,340 per ten gram at the futures trade due to profit-booking by investors and weak global cues. Silver prices dropped by Rs 117 to Rs 38,975 per kg at the futures trade. Read more

Spot gold edges down to $1,196

 

Gold prices inched down as dollar firmed up on upbeat US economic data and hawkish comments from Federal Reserve policymakers which raised the prospects of the central bank sticking to its tighter monetary policy. Spot gold inched down 0.1 per cent to $1,196.25 an ounce at 0447 GMT, after falling about 0.5 per cent in the previous session. Read more

Services sector PMI

 

The country’s services sector expanded at a slower pace in September as higher fuel costs and stronger US dollar made imported goods expensive. The seasonally-adjusted Nikkei India Services Business Activity Index recorded 50.9 in September, down from 51.5 recorded in August.  Read more

L&T Hydrocarbon bags new contract

 

L&T Hydrocarbon Engineering, in consortium with Baker Hughes, a GE company, and McDermott International, has bagged a sub-sea contract from ONGC for development of block DWN-98/2 in the Krishna Godavari basin. Read more

 

Nifty gainers, losers

 

The Sensex crashed 754.96 points to intraday low of 35,220.67 against Wednesday's close of 35,975.63 and the Nifty dropped 233.4 points to 10,624.85 against 10,858.25 as the Indian rupee collapsed to a new low of 73.81.

After opening weak at 73.72 against the previous close of 73.33, the domestic unit slumped to 73.81 as the US dollar reached a 11-month high against the yen and stood tall against other peers on upbeat US data and hawkish comments from Federal Reserve Chairman Jerome Powell.

Major Sensex losers were Reliance, Hero MotorCorp, TCS, Adani Ports and HDFC, while the only four gainers were YES Bank, L&T, Axis Bank and Vedanta.

 

ArcelorMittal, NuMetal allowed to bid for Essar Steel

 

The Supreme Court has granted one more opportunity to ArcelorMittal and NuMetal to bid for Essar Steel if they clear their NPA dues in two weeks. A Bench comprising Justices R F Nariman and Indu Malhotra held that both the firms were ineligible under amended Insolvency and Bankruptcy Code to bid for the firm but granted them a fresh opportunity after taking note of the plea of Committee of Creditors that it does not want liquidation of Essar Steel.  Read more

Bank Nifty

 

The Bank Nifty out-of the-money Put 25,000 contract was the main focus of traders’ attention on Wednesday. This out-of-the-money put option price gained 36.45 per cent to Rs 318.10. OI jumped 189.45 per cent. This confirms that the Bank Nifty underlying may get support around 24,700-24,800 levels in this expiry. Click here to read more

The S&P BSE Sensex crashed 697.61 points to 35,278.02 against the previous close of 35,975.63 and the Nifty50 plunged 212.8 points to 10,645.45 against 10,858.25 on heavy selling in IT, TECk, oil & gas and consumer durables stocks.

 

 

Top five Sensex losers were Reliance, Hero MotoCorp, TCS, IndusInd Bank and HUL, while the only five gainers were L&T, YES Bank, Axis Bank, Tata Motors and Vedanta.

 

6 NFOs to hit market in October

 

 

Notwithstanding the volatility in equity markets, about six new fund offers from leading mutual fund houses will open for subscription this month. The new offers come after a lull with the fund houses rejigging their existing schemes to meet the new norms on Categorisation and Rationalisation of Mutual Fund Scheme. Read more

Sectoral indices

All sectoral indices on Nifty were in the red.

 

 

Five factors that dampened the market sentiment

The rupee collapsed to a new low of 73.77 as the dollar reached a 11-month high against the yen and stood tall against other peers on upbeat US data and comments from Federal Reserve Chairman Jerome Powell that were seen as hawkish.

Brent crude rose to a four-year high of $86.60 on Wednesday, as the market focused on upcoming US sanctions on Iran while shrugging off the year's largest weekly build in US crude stockpiles and reports of higher Saudi Arabian and Russian production.

Rising bond yields have made investors jittery. 10-year bond yields jumped to 8.2 per cent in early trade against the previous close of 8.11 per cent.

Investors also remained concerned over continuous FII outflows. Overseas investors had pulled out Rs 21,000 crore ($3 billion) from the capital markets in September, making it the steepest outflow in four months, due to widening current account deficit and global trade tensions.

Weak Asian cues on rising US Treasury yields and strong economic data rattled the trading sentiment.

 

Sensex losers, gainers

 

The S&P BSE Sensex crashed 655.37 points or 1.82 per cent to 35,320.36 and the Nifty50 plunged 190.9 points or 1.76 per cent to 10,667.36 as rupee collapsed to a new low of 73.77.

The rupee slumped to new low, as Brent crude had hit a four-year high on Wednesday, raising concerns over current account deficit and capital outflows.

The dollar notched an 11-month top on the yen as stunningly strong US economic data drove Treasury yields to their highest since mid-2011, while Asian stocks were pressured as borrowing costs rose at home.

As per provisional data, foreign portfolio investors had bought shares worth a net of Rs 1,550 crore, while domestic institutional investors made purchases to the tune of Rs 1,402 crore on Wednesday.

Commerce and Industry Minister Suresh Prabhu will hold an inter-ministerial meeting later in the day to discuss trade deficit and its impact on rupee as well as ways to boost exports.

Representatives from the department of economic affairs, coal ministry, steel ministry, oil ministry and department of pharmaceuticals are expected to attend the meeting.

L&T shares jump 2%

 

L&T shares were trading up by 1.88 per cent at Rs 1,267.80 as Bangalore International Airport has mandated L&T Construction to develop Terminal 2 at a cost of ₹3,036 crore. Designed by US-based Skidmore, Owings & Merrill, the 255,000-sq m phase-1 of the new terminal, once completed, will scale up the capacity by 2.5 crore passengers annually. The phase is likely to be completed by March 31, 2021. L&T Construction is also constructing a new south parallel runway, apron and other works at Bengaluru airport currently.

 

RattanIndia Infra offer-for-sale

 

RattanIndia Infrastructure has informed the exchanges that Arbutus Consultancy LLP, a promoter group entity, intends to offload about 11.17 crore shares through an offer-for-sale on the BSE. The offer opens today (for non-retail investors) and on Friday (for retail investors and for non-retail investors who wish to carry forward their bids). The floor price of the OFS is ₹3.80 a share and a discount of 5 per cent on it is being offered to retail investors. _ Our Bureau

Rupee collapses to 73.77

 

The rupee collapsed to a fresh low of 73.77 against the US dollar, as global oil prices continued to rise, deepening concerns over current account deficit and capital outflows. At 9.55 am, the rupee was trading weak by 37 paise at 73.71. Read more

Broker's call

Centrum Broking

Visaka Ind (Buy)

CMP: ₹437.05

Target: ₹950

Read more

Dollar hits 11-month high

 

The dollar reached an 11-month high against the yen and stood tall against other peers, boosted by new upbeat US data and comments from Federal Reserve Chairman Jerome Powell that were seen as hawkish. The dollar stretched an overnight rally to touch 114.55 yen, its highest since early November 2017. Read more

Asian markets

 

The dollar notched an 11-month top on the yen as stunningly strong US economic data drove Treasury yields to their highest since mid-2011, while Asian stocks were pressured as borrowing costs rose at home.

MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.1 per cent in response, with South Korea, the Philippines, Indonesia and Taiwan all down. Even the Nikkei eased 0.2 per cent, as rising yields offset the boost to exporters from a weaker yen. Read more

The S&P BSE Sensex crashed 633.95 points to 35,341.68 against the previous close of 35,975.63 and the Nifty50 dropped 185.4 points to 10,672.85 against 10,858.25.

Today's stock pick

 

Den Networks (₹58.7): Buy

Investors with a short-term horizon can buy the stock of Den Networks at current levels. The stock has been in a short-term sideways consolidation phase since taking support at ₹45 in mid-July 2018. Read more

Day Trading Guide

Given below are supports and resistances for Nifty 50 futures and seven key stocks that can help in your intra-day trading:

₹2031 • HDFC Bank

 

₹727 • Infosys

 

₹294 • ITC

 

₹181 • ONGC

 

₹1205 • Reliance Ind.

 

₹270 • SBI

 

₹2162 • TCS

 

10893 • Nifty 50 Futures

 

S1, S2 : Support 1 & 2; R1, R2: Resistance 1 & 2.