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Sensex plunges nearly 300 points; rupee weighs
Benchmark indices ended near one year lows amid weak global cues, along with selling pressure by institutional investors after the rupee which touched a fresh all-time low of Rs 62.85/$ raising worries of a widening current account deficit and higher inflation.
The 30-share Sensex ended lower by 291 points to 18,308 and the 50-share Nifty dropped 93 points to 5,415.
The Sensex and the Nifty touched an intra-day low of 18,139 mark and 5,361 levels, respectively. The Nifty slipped below 5,400 mark for the first time since September 12, 2012.
Among borader markets, BSE Midcap and Smallcap indices dipped between 1-1.4%. The market breadth in BSE ended weak with 1,401 shares declining and 886 shares advancing.
India VIX, the key gauge of market volatility, spiked over 10% to 26 levels in today's trade. It crossed 26 levels for the first time since September, 2012.
MONEY MARKET
The rupee fell to yet another record low on Monday as the government's steps unveiled last week seemed inadequate to stall the currency's fall. The currency fell as far as 62.85 to the dollar, breaching the previous low of 62.03 hit on Friday.
India's benchmark 10-year government bond yield rose to 9 percent on Monday afternoon as the rupee continued to make a series of record lows as the government's measures were seen as inadequate to halt the free-fall in the currency.
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Sensex plunges nearly 300 points; rupee weighs
FIIs
Foreign institutional investors extend selling in index futures for a fourth day on Friday, totalling sales of 20.63 billion rupees, indicating they are bracing for lower levels in cash shares in the near term, dealers say.
Derivatives analysts say the rise in outstanding positions in index futures, coupled with a fall in cash share indexes, indicates the formation of short positions.
GLOBAL MARKETS
Japan's Nikkei share average rose on Monday as investors found buying opportunities in oil companies on rising oil futures, but trading was subdued as the market was focused on the minutes of the U.S. Federal Reserve's July policy meeting this week for more cues on when it will likely start tapering the stimulus.
The benchmark Nikkei gained 0.8% to 13,758.13 in choppy trade after falling to as low as 13,589.78 earlier. The Topix added 0.6% to 1,149.13.
European markets too are trading weak with CAC, DAX and FTSE dn 0.04-1%.
GOLD
Gold prices in India, the world's biggest buyer of the metal, hit their highest level in more than seven months, helped by a rupee that weakened to a record low again.
The actively traded gold contract for October delivery on the Multi Commodity Exchange was 0.1% lower at 30,809 rupees per 10 grams, after hitting a high of 31,000 rupees earlier in the day, a level last seen on January 7.
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Sensex plunges nearly 300 points; rupee weighs
SECTORS & STOCKS
BSE Auto index and BSE Bankex slumped by over 3% each followed by counters like Healthcare, PSU, Capital Goods, Oil & Gas, FMCG and Consumer Durables, all declining between 1-2.5%. However, BSE Metal and IT indices were up 0.3-2%.
Banking shares were under pressure second day in a row with the National Stock Exchange Bank Nifty hits its lowest level since January last year.
Bank Nifty ended lower over 3%, falling 8.5% in past two trading sessions after the Reserve Bank of India (RBI) on Wednesday has announced additional measures to support the Indian rupee by stemming foreign exchange outflows by Indian residents. The index hit low of 9,163 during intra-day trades, its lowest level since January 19, 2011.
A sharp fall in banking stocks has seen the average price-to-earnings (P/E) ratio, an indicator of market valuations, of S&P BSE Bankex dip to over four-year-low of 9.53, indicating that investors are willing to pay much less for banking shares at present.
Most of the banking stocks including public sector as well as private sector were trading at their multi years low. ICICI Bank, Bank of Baroda, Axis Bank, Punjab National Bank, Canara Bank, Bank of India, YES Bank and Union Bank of India were down 3-7% on NSE.
Shares of Axis Bank, India's third largest private lender, slipped below Rs 1,000 mark in today's trade. Last the counter traded below this level was in September, 2012.
Auto stocks were hit the hardest in today's trade.
M&M declined by nearly 4%. It was followed by India's third largest two-wheelers maker Bajaj Auto, which is trading 4% down. Bajaj, which was reeling under workers' strike till last week, could see its shares surge as reaction to strike end. The stock fell by nearly 5%.
Hero MotoCorp and Tata Motors were among the other top Auto makers which took a severe beating on a day when benchmark indices continued their steep decline for the second trading session in a row.
Other notable losers were Bharti Airtel, ONGC, Cipla, Sun Pharma, L&T, BHEL and NTPC.
Meanwhile, metal stocks bucked the trend in trade on the stock exchanges.
Shares of Sterlite Industries, Tata Steel, Hindalco and Jindal Steel gained between 3-5%.
Shares of Multi Commodity Exchange of India Limited (MCX) was locked in upper circuit of 5% at Rs 255 on BSE, in otherwise weak market; after the company said it has no exposure to crisis-hit National Spot Exchange Limited (NSEL), which had to settle dues worth Rs 5,600 crore to investors after it suspended trading.
