Markets Live: Sensex tanks 467 points; Nifty drops to 11,438

The Sensex tanked 468 points or 1.22 per cent to end below the 38,000 mark as the rupee crashed to a fresh record low of 72.67 against the dollar. Negative global cues and widening of current account deficit to $15.8 billion in April-June this year ($15 billion) spooked investor sentiment.

The 30-share index closed at 37,922.17, down by 467.65 points or 1.22 per cent, which was its biggest single-day fall since March 16 when it had lost 509.54 points.

The 50-share NSE Nifty also slipped below the 11,500-level by plunging 151 points or 1.30 per cent -- its biggest single day fall since February 6 -- to close at 11,438.10. Intraday, it also hit a low of 11,427.30.

Top five Sensex losers were Sun Pharma, M&M, Vedanta, IndusInd Bank and State Bank of India, while the only four losers were Axis Bank, Wipro, YES Bank and TCS.

Except IT, all other BSE sectoral indices ended in the negative zone.

 

 

Global markets fell as investors remained cautious owing to fears of a possible escalation in the US-China trade conflict. US President Donald Trump had last week threatened tariffs on all Chinese imports, while Beijing warned of retaliation if the US goes ahead with any new measures.

Domestic sentiment also took a blow after Moody’s Investors Service said sustained weakening of the rupee is credit negative for Indian companies which generate revenue in rupees but rely on US dollar debt to fund their operations.

The rupee has depreciated 13 per cent so far in 2018 and has touched a historic low of Rs 72.67 to a dollar but staged a comeback on strong intervention of the Reserve Bank of India.

Surging crude oil prices globally too had a rub-off effect on Indian stocks and rupee, says market analysts.

Global markets

 

World shares were flirting with their longest run of declines since early 2016, hit by rising anxiety about the US-China trade war and another interest rate increase by the Federal Reserve later this month. Europe defended its ground early on, but it was proving a struggle after a fresh sell-off by Chinese shares pulled Asian and emerging-market equities to 14-month lows.  Read more

European markets

 

The pan-European STOXX 600 index added 0.25 per cent by 0821 GMT after ending on Friday just above its lowest close since early April. The export-oriented DAX fell 0.1 per cent and the FTSE rose 0.1 per cent. Read more

Bullion rates

 

Gold prices surged Rs 200 to Rs 31,550 per 10 gram on increased buying by local jewellers and weakening of rupee to 72.67 against the dollar. Silver too advanced by Rs 175 to Rs 37,950 per kg on increased demand from industrial units and coin makers.  Read more

Debt MFs see Rs 6,803 cr outflow

 

 

Debt mutual funds witnessed an outflow of over Rs 6,800 crore by investors in August as the yields hardened due to concerns over rupee’s weakness and rising oil prices and their impact on inflation and current account deficit. Read more

Pre-close trade

The Sensex crashed 452.60 points or 1.18 per cent at 37,937.22 and the Nifty plunged 154.2 points or 1.33 per cent to 11,434.90.  All BSE sectoral indices were in the negative zone.

 

Major Sensex losers were Sun Pharma, M&M, Vedanta, State Bank of India and IndusInd Bank, while the only five gainers were Axis Bank, Wipro, YES Bank, Infosys and TCS.

Sweet deal for Aurobindo Pharma

 

The acquisition of Sandoz Inc will enhance Aurobindo’s pipeline — a total of 487 ANDA filings as on June 2018. The company has guided for sales of $900 million in the first 12 months. The acquisition will be fully funded by debt. The company’s net debt-to-equity ratio of 0.4 may increase to around 0.6 due to the acquisition. Despite the rise in the stock price, valuations are not expensive at around 19 times trailing earnings. Click here to read more

Jindal Stainless (Hisar): Focus on value

 

With strong demand outlook for stainless steel and the company’s focus on value-added and specialty products, the prospects for JSHL look impressive. At the current market price of ₹132, the stock is reasonably valued at about six times its trailing 12-month earnings, lower than what it traded at, on an average, over the past three years — 33 times.  Click here to read more

Domestic shares were trading down by over 1 per cent on heavy selling in metal, FMCG, oil & gas and realty stocks amid negative global cues. However, IT and TECk indices found investors' support.

 

 

The Sensex was down 386.32 points or 1.01 per cent at 38,003.50 and the Nifty down 132.30 points or 1.14 per cent at 11,456.80.

Weakening of rupee to a new low of 72.67, widening of current account deficit to $15.8 billion in April-July and rising crude oil prices dampened the trading sentiment.

Global markets turned weak as US President Donald Trump had warned he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.

Top five Sensex gainers were Axis Bank, Infosys, YES Bank, Wipro and Tata Motors, while the major losers were Vedanta, M&M, Sun Pharma, IndusInd Bank and Kotak Bank.

 

 

 

 

Seven countries, including Sri Lanka, Pakistan and Turkey, are at the risk of exchange rate crisis as investors re-assess their risks following the contagion in Argentina and Turkey, a new index by Nomura says.  Read more

Dilip Buildcon: On the fast track

 

Dilip Buildcon stock nearly halved in price after rumours of the company’s auditors resigning, surfaced in May. But the company and the audit firm itself have brushed aside these reports as baseless.The decline in the stock price presents a good opportunity for investors with a two-year horizon. At ₹798, the stock trades at a little over 11 times its likely per share earnings for FY20, making it an attractive bet. Read more

 

CARE downgrades IL&FS debt instruments

 

CARE Ratings has downgraded various debt instruments and bank facilities (aggregating ₹14,249 crore) of Infrastructure Leasing & Financial Services Ltd. It has cited build-up of liquidity pressure on the group due to delay in raising funds. Read more

SEBI initiates discussion on FPI norms

 

In a relief to foreign investors worried over new KYC and beneficiary ownership norms, SEBI has initiated a public consultation process for finalising the new guidelines after a high-powered panel suggested changes on several contentious proposals and more time for compliance. Click here to read more

Domestic shares were trading down by 1 per cent, tracking broader Asia as fears of a potentially major escalation in the Sino-US trade conflict weighed on investor sentiment, while the rupee depreciated to a fresh low, bolstering inflation concerns.

The broader NSE index was trading down 125.45 points or 1.05 per cent at 11,467.65 and the benchmark BSE index was down 375.94 points or 0.98 per cent at 38,013.88 after two consecutive sessions of gains.

Financials led the losses with HDFC Bank and Housing Development Finance Corp leading the pack, down 1.2 per cent and 1.6 per cent, respectively.

Energy shares also lost ground with the Nifty energy index declining as much as 1.3 per cent. Reliance Industries fell 0.4 per cent, while Coal India Ltd shed 1.9 per cent.

On Friday, US President Donald Trump had warned he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.

The rupee declined in line with other Asian currencies under pressure from a stronger dollar, higher crude prices and rising global trade tensions. It slipped to a lifetime low of 72.67 per dollar.

The NSE stock index is being dominated by heavyweights such as HDFC Bank Ltd, Housing Development Finance Corp Ltd, Reliance Industries , Tata Consultancy Services and Infosys Ltd , said Pritam Deuskar, fund manager at Bonanza Portfolio Ltd.

These heavyweights have about 40 per cent impact on the Nifty, he said, adding that the range for Nifty in the near term was 11,300-11,900 levels.

FIIs pull out Rs 5,649 crore

 

Foreign investors have pulled out Rs 5,649 crore from the Indian capital markets in the last five trading sessions, after putting in money during the previous two months, due to unabated fall in rupee and rise in crude oil prices. Click here to read more

Rupee in a free fall

Bank of America Merrill Lynch thinks that RBI can sell another US$25-30bn without breaching the 8-month import cover, on FY20 basis. RBI will have to resume intervention soon.

 

Nifty Call: Go short with stop-loss at 11,540

The Nifty 50 futures contract began the session on a weak note. The contract opened with a gap-down at 11,594 and fell sharply to hit a low of 11,499. It is currently hovering at the day's low. Read more

Fund call: Bharti Airtel

Traders with a high-risk appetite can consider going long on Bharti Airtel futures, with an initial target of ₹427, by keeping the stop-loss at ₹383. The stock of Bharti Airtel was trading at Rs 387, down 3.80 in the BSE. Read more

 

BSE sectoral indices

Barring IT and TECk, all other sectoral indices were trading in the red .

 

NSE sectoral indices

 

The Sensex crashed 419.74 points to intraday low of 37,970.18 against the previous close of 38,389.82 and the Nifty dropped 134 points to 11,455.30 against 11,589.10 as the rupee breached the 72.5 mark for the first time ever.

 

 

Negative global cues as US President, Donald Trump, has threatened to impose another $267 billion of goods on top of $200 billion in imports primed for levies in coming days dampened investor sentiment.

Domestic sentiment was also hit due to widening of current account deficit to $15.8 billion in April-June this year against $15 billion in the same quarter of 2017-18. Rising crude oil prices and sustained capital outflows also hurt the trading sentiment.

 

Why, really, did the INR fall?

 

Sure, the dollar has risen against the currencies of most other emerging economies and, in the case of India, its huge dependence on imported crude oil, whose prices are rising, which results in a rising current account deficit, is another factor. For sure.  Click here to read more

M-cap of top-10 Sensex cos

 

Seven of the 10 most valued Indian companies suffered an erosion of Rs 75,684.33 crore from their market valuation last week, with FMCG major HUL taking the steepest hit. The market capitalisation of Hindustan Unilever tumbled Rs 29,449.99 crore to Rs 3,54,774.44 crore. Read more

Tata Global hits 10-week high

 

Shares of Tata Global Beverages Ltd jumped as much as 5.5 per cent to Rs 235.15, their biggest intraday percentage gain in nearly 10 weeks. More than 3.1 million shares traded vs 30-day avg of 2.9 million shares. Read more

Axis Bank jumps nearly 5%

 

Shares of Axis Bank Ltd rose as much as 4.8 per cent to Rs 676.50, their biggest intraday percentage gain in 5 weeks. About 24 of 47 brokerages have rated the stock “buy” or higher, 16 ”hold” and 7 “sell” or lower. Read more

Spot gold down at $1,195

 

Gold held on to a small loss from the previous session, as the dollar firmed amid expectations of a US Federal Reserve interest rate hike in September and fears of escalating trade tensions between the United States and China.

Spot gold was down 0.1 per cent at $1,194.61 at 0225 GMT, having fallen 0.4 per cent in the previous session. US gold futures were almost flat at $1,200.30 an ounce. Read more

Domestic shares were trading down by nearly one per cent due to negative global cues, weakening of rupee to a new low of 72.45 and widening of current account deficit to $15.8 billion in April-June this year against $15 billion in the same quarter of 2017-18.

The S&P BSE index was down 293.19 points or 0.76 per cent at 38,096.63 and the Nifty50 down 93.45 points or 0.81 per cent at 11,495.65.

Barring IT and TECk, all other BSE sectoral indices were trading in the negative zone.

 

Top five Sensex gainers were Axis Bank, Infosys, Wipro, Tata Motors and Adani Ports, while the major losers were PowerGrid, IndusInd Bank, Kotak Bank, Bharti Airtel and HDFC.

 

WTI crude jumps to $68/barrel

 

Oil prices rose as US drilling for new production stalled and as the market eyed tighter conditions once Washington's sanctions against Iran's crude exports kick in from November. WTI crude futures were at $68.19 per barrel at 0344 GMT, up 44 cents, or 0.65 per cent, from their last settlement. Brent crude futures climbed 50 cents, or 0.65 per cent, to $77.33 a barrel. Read more

Forex market

 

The dollar held largely steady on strong US August jobs data amid fears of a possible escalation in the China-US trade conflict. The dollar index was basically flat at 95.381, not far off a three-week high of 95.737 hit on Tuesday last week. Read more

 

Moody's Investor Service has cautioned that a sustained weakening of rupee would be credit negative for its rated Indian companies, particularly those that generate revenue in rupees but rely on US dollar debt to fund their operations and have a significant dollar-based costs, including capital expenses. Read more

Sensex movers, shakers

 

Kaveri Seed: A rich harvest

 

Investors with a long-term view can buy the stock of Kaveri Seed Company. At the current market price of ₹641, the stock discounts its estimated earnings for 2018-19 by 18 times. The stock trades at a PE of 21.5 times on a trailing earnings of last one year. Over the last three years, it has traded in a PE band of 10-28 times. Click here to read more

The Sensex slumped nearly 300 points to intraday low of 38,098.69 and the Nifty dropped 90 points to 11,498.70 owing to negative global cues, weakening of rupee to a fresh record low of 72.35 and widening of current account deficit to $15.8 billion in April-June this year.

US President Donald Trump had on Friday threatened tariffs on a further $267 billion worth of Chinese imports. However, Beijing has warned of retaliation if the US goes ahead with any new measures.

The rupee plunged to a new record low of 72.35 against Friday's close of 71.73 due to heavy dollar demand from importers and strengthening of dollar against other currencies overseas.

Meanwhile, according to RBI data released on Friday, India’s current account deficit (CAD) widened to $15.8 billion in April-June this year against $15 billion in the same quarter of 2017-18 in value terms, mainly due to a higher trade deficit.

As per provisional data, foreign portfolio investors had bought shares worth Rs 37.56 crore, while domestic institutional investors (DIIs) bought shares to the tune of Rs 942.45 crore on Friday.

Asian markets

 

Asian shares fell for the eighth straight day, while the dollar climbed as US President Donald Trump raised the stakes in the heated trade dispute with China.

MSCI's broadest index of Asia-Pacific shares outside Japan was last down 0.6 per cent, extending losses from last week when it dropped 3.5 per cent for its worst weekly showing since mid-March. Read more

Rupee slumps to 72.18

 

The rupee slumped to a fresh record low of 72.18 by falling 45 paise against the US dollar due to strong demand for the US currency from importers and strengthening of dollar against other currencies overseas on upbeat jobs data. Read more

The Sensex dropped 171.85 points or 0.45 per cent to 38,217.97 and the Nifty fell 30.95 points or 0.43 per cent to 11,539.75 as the rupee slumped to a fresh record low of 72.18 against the dollar. Sustained foreign fund outflows and weak global cues also dampened the trading sentiment.

Except IT, TECk and healthcare, all other BSE sectoral indices were trading in the negative territory.

 

Top five Sensex gainers were Axis Bank, Wipro, YES Bank, Bajaj Auto and Infosys, while the major losers were PowerGrid, Kotak Bank, IndusInd Bank, ONGC and Tata Motors.

Asian shares started the week in the red, while the dollar climbed as US President Donald Trump raised the stakes in the heated trade dispute with China.

MSCI's broadest index of Asia-Pacific shares outside Japan was last down 0.6 per cent, extending losses from last week when it dropped 3.5 per cent for its worst weekly showing since mid-March.

Your stock portfolio

Hindustan Unilever (₹1,638.9)

As long as the stock trades above ₹1,300, the long-term uptrend will remain in place and the investors can remain invested with a stop-loss at ₹1,275. Key long-term supports below ₹1,300 are placed at ₹1,200 and ₹1,100 levels.

McDowell Holdings (₹29.9)

With the volume traded low and the stock not progressing in a clear direction, desist taking position in the low liquidity stock. A fall below the immediate support level of ₹25 can pull the stock down to ₹20 and then to ₹16.5 over the medium term. Click here to read more

Opening bell

The 30-share BSE index Sensex opened lower by 45.24 points at 38,344.58 against the previous close of 38,389.82 and the 50-share NSE index Nifty down 22.1 points at 11,567 against Friday's close of 11,589.10.

Weekly Trading Guide

SBI (₹291.8)

SBI tumbled over 5 per cent last week. Medium-term traders can hold the long positions. Retain the stop-loss at ₹283.

ITC (₹310.4)

ITC failed to sustain the bullish momentum last week. Investors can hold the long positions and retain the stop-loss at ₹265.

Infosys (₹733.1)

Infosys surged over 4 per cent intra-week but failed to retain the momentum. Long-term investors who have booked partial profits at ₹740, as advised, can retain the rest of the positions with a stop-loss at ₹630.

RIL (₹1,276.7)

RIL fell last week as expected. Short-term traders with a high-risk appetite can go long at current levels and accumulate on dips at ₹1,260. Stop-loss can be placed at ₹1,220.

Tata Steel (₹619)

Tata Steel has rallied 2.9 per cent last week and closed on a strong note. Traders with a medium-term perspective can go long at current levels and stop-loss can be placed at ₹560.

Full guide here

Index Outlook

In the coming truncated week, the focus will be on macroeconomic data such as CPI and WPI which are due for release. Also, rising crude oil price and weakening rupee should be closely watched. Investors can consider taking some profits off the table if the domestic benchmark indices struggle to find fresh momentum. Read more