Sensex tumbles 268 points as investors remain wary of an economic slowdown

Closing bell

Benchmark equity index Sensex slumped 268 points, dragged by losses in ITC, HDFC, L&T and ICICI Bank as investors remained wary of an economic slowdown.

After plunging 305 points, the 30-share Sensex settled 267.64 points, or 0.72 per cent, lower at 37,060.37. It hit an intra-day high of 37,406.55 and a low of 37,022.52. The broader NSE Nifty too ended 98.30 points, or 0.89 per cent, down at 10,918.70. During the day, it swung between a high of 11,034.20 and a low of 10,906.65.

Tata Motors was the biggest laggard in the Sensex pack, plummeting 9.29 per cent, followed by Yes Bank at 8.21 per cent. Other losers included Tata Steel, ONGC, IndusInd Bank, SBI, L&T, ITC, Vedanta, HCL Tech, ICICI Bank and M&M, which declined up to 4.26 per cent.

Hero MotoCorp, Infosys, Tech Mahindra, HUL, Bajaj Auto, Maruti, NTPC and HDFC Bank bucked the weak market trend, rising up to 1.78 per cent.

Globally, markets are keenly awaiting comments from Federal Reserve Chair Jerome Powell in Jackson Hole, Wyoming, US. Investors will also be tracking the G7 Summit during August 25—27 in France.

Elsewhere in Asia, Shanghai Composite Index, Hang Seng and Kospi ended on a positive note, while Nikkei settled in the red. Equities in Europe were trading significantly higher in their respective early sessions.

Meanwhile, the Indian rupee appreciated 22 paise to 71.49 against the US dollar intra-day. Brent crude futures, the global oil benchmark, spurted 1.28 per cent to USD 60.80 per barrel. - PTI

Yes Bank to take call on asset management business

YES Bank is planning to take a long hard look at its asset management business. The move comes at a time when banks are looking to optimise their capital by divesting non-core assets. The operating environment for mutual funds has become challenging, with financial markets in a yo-yo mode.

YES Bank's wholly-owned subsidiary, YES Asset Management (India) Ltd, currently has about Rs 1,400 crore of average assets under management. Here's more on Yes Bank's take on its asset management business

European stocks

The pan-European STOXX 600 index rose 0.7 per cent. File Photo

Car industry shares drove a rebound in European stock markets, helped by an Italian newspaper report suggesting merger talks between Fiat Chrysler and Renault have gained some traction in recent weeks. The pan-European STOXX 600 index rose 0.7% at 0818 GMT, with the autos index up 1.6 per cent. Italy's FTSE MIB moved 1.4 per cent higher, bouncing back from a drop in the previous session amid a deepening Italian political crisis. Click here to read more on the European stock markets here

Dr Reddy's shares fall

Pharma major  Dr Reddy’s scrip falls 1.65 per cent to Rs 2,512.70 in the afternoon trade on the Bombay Stock Exchange.

RIL's $4 billion investment hurt by global glut

Reliance Industries announced it in 2012, its project to convert petroleum coke, or petcoke, one of the cheapest and dirtiest refinery by-products, into gas needed to power the massive Jamnagar complex on India’s west coast. Then it hit about three years of delays, and global gas markets crashed amid a growing supplies of liquefied cargoes from the US, Australia and Russia.

The gasifiers, originally scheduled to begin operations in 2016, are now in the final stages of being stabilised and integrated with other facilities, with an expected increase to full capacity in March. Read more on Reliance Industries' natural gas project here

The stocks of Reliance Industries were trading 0.16 per cent lower at Rs 1,274.

Sensex, Nifty fall over 0.5%

The 30-share BSE index Sensex plunged 206.16 points or 0.55 per cent to 37,121.85 led by the loses in the metals stocks, that was trading lower by over 3 per cent. Meanwhile, the 50-share NSE index Nifty slumped 75.50 points or 0.69 per cent to 10,941.50.

The major losers in the Sensex pack were Tata Motors, Yes Bank, Tata Steel, ONGC and L&T while the gainers stocks cushioning the index were Hero MotoCorp, Infosys, Tech Mahindra, Hindustan Unilever and Bajaj Auto.

In the broader index, the stocks dragging the Nifty down were Tata Motors, Yes Bank, IBUL Housing Finance, Tata Steel and Grasim while the gainers pack were led by Hero MotoCorp, Infosys, Eicher Motors, Bajaj Auto and Tech Mahindra.

Nifty Call

The CNX Nifty logo is displayed on a wall at the National Stock Exchange (NSE) in Mumbai, India, on Monday, May 19, 2014. Indian stock-index futures rose and rupee forwards strengthened as benchmark gauges advanced to record highs last week after the main opposition alliance's biggest election win in 30 years. Photographer: Dhiraj Singh/Bloomberg

The market breadth of the Nifty index is biased towards declines. The Nifty mid and small-cap indices have slumped 0.9 per cent and 1 per cent respectively. Apart from the Nifty IT index which is hovering in the positive territory with marginal gains, other sectoral indices are featuring in the negative territory. The Nifty August month contract began the session with a gap-down open at 11,013. Read our Nifty Call for August futures here

Nomura's GDP prediction

India’s economic growth is set to slow further in the April-June quarter of this year to 5.7 per cent amid contraction in consumption, weak investments and an under-performing service sector, says a Nomura report. Some indicators are showing early signs of bottoming out. Data so far for July show that 53 per cent of indicators have improved compared with 31 per cent in June, the report noted. Click here to read more on Nomura's report on India's GDP growth

Indices continue to decline

The 30-share BSE index Sensex was trading lower at 37,219.80, down 108.21 points or 0.29 per cent while the NSE index was trading 41 points or 0.37 per cent lower at 11,976. All the major sectoral indices, barring IT and TeCk stocks, were trading in negative zone.

The top losers in the Sensex pack were Tata Motors, Yes Bank, Tata Steel, ONGC and L&T while the gainers lending support to the index were Hero MotoCorp, NTPC, Infosys, Kotak Mahindra Bank and TCS.

In the broader index Nifty, the scrips leading the positive pack were Eicher Motors, Hero MotoCorp, Infosys, Maruti and Tech Mahindra while the laggards were Tata Motors, Yes Bank, Tata Steel, Vedanta and IBUL Housing Finance.

Ujjivan SFB to dilute stake

Samit Ghosh (file photo)

Ujjivan Small Finance Bank is planning to dilute promoter stake in the bank by 10 to 15 per cent. This would include selling 10 per cent equity in its  planned initial public offering (IPO) , besides employee stock options and an employee stock purchase scheme. Ujjivan Financial Services (UFS)  is the holding company and promoter of its 100 per cent subsidiary, Ujjivan SFB. Click here to read more on the promoter's stake dilution in Ujjivan Small Finance Bank

The stock of Ujjivan Finance Services was trading 4.67 per cent lower at Rs 258.

Broker's call

Elara Capital

CMP: ₹316.2

Target: ₹390

Loan book growth remains soft at 13 per cent y-o-y for 1QFY20, as home State (Tamil Nadu) woes increase post the recent draught. Concerns on Repco are, a continued subdued growth in TN, a late diversification outside home State followed by an aggressive growth and stickiness in NPA with inadequate provisioning. Read our Broker's call on Repco Home Finance here

TCS reclaims most-valued firm status

Tata Consultancy Services on Tuesday reclaimed the status as the country’s most-valued company by market valuation replacing Reliance Industries Ltd. At the end of trade on Tuesday, the market capitalisation (m-cap) of TCS was at ₹8,20,702.82 crore, which is ₹11,835.13 crore more than that of RIL’s ₹8,08,867.69 crore.

The stocks of Tata Consultancy Services is currently trading 0.45 per cent higher at Rs 2,197.

Sensex slumps 143 points

The 30-share BSE Index Sensex slumps 143.13 points or 0.38 per cent to 37,184.88. Similarly, the 50-share NSE index Nifty falls 54.40 points or 0.49 per cent to 10,962.60.

While the metal stocks emerged the biggest loser, the industry heavyweights - Infosys, TCS and HDFC Bank were the gainers in the index.

The top stocks lending support to the Sensex pack were Hero MotoCorp, Infosys, Tech Mahindra, Hindustan Unilever, and Maruti while the laggards were Tata Motors, Yes Bank, Tata Steel, Vedanta and ONGC.

In the NSE index, stocks leading the positive pack were Eicher Motors, Hero MotoCorp, Infosys, Maruti and Tech Mahindra while the scrips of Tata Motors, Yes Bank, Tata Steel, Vedanta and IBUL Housing Finance were in the negative zone.

HDIL shares drops

Shares of  Housing Development and Infrastructure Ltd  slump 20 per cent, their biggest daily percentage loss since October 10, 2008. Around 6 million shares change hands vs 30-day average of 14.9 million shares. Up to last close, HDIL has lost 58 per cent this year, while Bank of India dipped 36 per cent.

Gold and precious metals

US gold futures were down 0.2 per cent at $1,513.30 an ounce.

Gold prices held steady after recovering to above the key $1,500 an ounce level in the previous session, with investors waiting for the minutes of the Federal Reserve's July meeting for possible clues on further US interest rate cuts. Futures are fully priced for a quarter-point cut in rates next month, and over 100 basis points of easing by the end of next year. Read more on the gold and other precious metals prices and the bullion market

Eyes on Fed meet and G7 summit

Shares were little changed in the absence of major cues, in line with broader Asia, as investors were hopeful of monetary and fiscal stimulus from the US Federal Reserve amid recession and trade war worries.

The broader NSE index was trading 0.14 per cent or 15.05 points down at 11,001.95, while the benchmark BSE index was 0.06 per cent or 23.09 points down at 37,304.92.

Meanwhile, traders in regional markets across Asia awaited cues from the US Federal Reserve's annual Jackson Hole seminar later this week and a Group of Seven summit later this weekend for clues on what additional steps policymakers will take to boost economic growth.

MSCI's broadest index of Asia-Pacific shares outside Japan dithered either side of flat after three straight days of gains. “This week the focus will be on the Jackson Hole Symposium of central bankers, Fed chair (Jerome) Powell's speech and the G7 summit in France,” said Rajesh Cheruvu, Chief Investment Officer at Validus Wealth. “There are concerns that authorities may sell more debt to finance further fiscal stimulus.”

In the domestic market, the metals index was the top loser, shedding over 1.2 per cent, as China's iron ore prices hit a 10-week low after mining giant BHP Group gave a downbeat outlook for steelmaking raw material prices.

Tata Steel and Vedanta Ltd were among the top losers on the NSE, dropping about 2 per cent each. Among gainers, Eicher Motors rose 1.3 per cent. - Reuters

Commodities market

Prices for Brent oil rose above $60 a barrel for the first time in over a week amid data that showed a larger-than-expected drawdown in US crude inventories, but ongoing worries about a global economic recession capped gains.

Crude prices were also buoyed by official data showing lower exports in June from Saudi Arabia, the world's top oil exporter. Read the commodities market report here

CG Power plunges

Shares of  CG Power And Industrial Solutions Ltd  slump nearly 20 per cent to ₹11.85, their biggest percentage loss since October 5, 2012. The shares hit lower circuit on second consecutive day. As of last close, stock down 67 per cent this year.

Sensex bounces back in green

The 30-share BSE index Sensex bounced back into positive zone led by industry heavyweights after opening in red. Sensex was trading 19.70 points or 0.05 per cent higher at 37,347.71. Meanwhile, the broader index Nifty was trading 1.60 points or 0.01 per cent lower at 11,015.40.

The stocks of Infosys, HDFC Bank, Hero MotoCorp, Maruti and Bajaj Auto were leading the positive pack in the BSE index while the laggards were Tata Motors, Yes Bank, Tata Steel, Vedanta, and ITC.

Sectorally, the metal stocks emerged biggest loser.

In the broader index, the stocks lending support were Infosys, Eicher Motors, Maruti, State Bank of India and Wipro while the top losers were Dr Reddy's, Yes Bank, IBUL Housing Finance, Britannia and Tata Motors.

Rupee market

Rupee pared some gains and was trading at 71.57 against the dollar.

The rupee rebounded from six-month low level and appreciated by 23 paise to 71.48 against the US dollar in early trade tracking gains in Asian currencies and fresh foreign fund inflows. At the interbank foreign exchange, the rupee opened at 71.48, registering a rise of 23 paise over its previous close of 71.71.

Forex traders said Asian currencies including South Korean won, Malaysian ringgit, Indonesian rupiah, Taiwan dollar and Philippines peso were trading higher. Click here to read the local currency market

US markets

The S&P 500 financial index dropped 1.4 per cent.

Financial shares led US stocks lower to end a three-day rally as investors awaited comments from Federal Reserve Chair Jerome Powell at the end of the week. The S&P 500 financial index dropped 1.4 per cent and the group weighed most heavily on the benchmark index among its major sectors, which all registered losses.

The S&P 500 is now 4.1 per cent shy of its record closing high in July after having fallen as much as 6.2 per cent below that level. Read the US stock markets report here

Global markets

Asian shares flatlined as worries about global recession and endless trade wars vied with hopes for a lot more monetary and fiscal stimulus to keep growth going. MSCI's broadest index of Asia-Pacific shares outside Japan dithered either side of flat after three straight days of gains. Read the global stock markets report here

Markets on tepid note

Domestic equity benchmarks BSE Sensex and NSE Nifty started on a negative note as investors remained risk averse due to uncertainties over economic growth.

The 30-share index was trading 23.64 points, or 0.06 per cent, lower at 37,304.37. The broader Nifty falls 6.45 points, or 0.06 per cent, to 11,010.55. In the previous session, the Sensex settled 74.48 points, or 0.20 per cent, lower at 37,328.01. The Nifty too ended 36.90 points, or 0.33 per cent, down at 11,017.

Top laggards in the Sensex pack included Tata Motors, Yes Bank, Vedanta, ONGC, Tata Steel and HCL Tech, which fell up to 3 per cent. While, Hero MotoCorp, Infosys, M&M, TechM and Maruti rose up to 1 per cent.

The Nifty has lost almost a 1,000 in the past three months and market sentiments continue to remain weak in the near term, said Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas. “Domestic markets continue to reel under pressure of slowing growth and the street consensus is that the government may come up with a special package to boost the economy,” he added.

Foreign portfolio investors bought shares worth a net of Rs 373.23 crore Tuesday, and domestic institutional investors too purchased shares worth Rs 296.41 crore, provisional data showed.

The rupee, meanwhile, appreciated 17 paise against its previous close to trade at 71.54 in early session.

Elsewhere in Asia, bourse in Hong Kong, Korea, Shanghai and Japan were trading on a mixed note in their respective late morning sessions. Exchanges on Wall Street ended in the red on Tuesday.

Global oil benchmark Brent crude was trading 0.52 per cent higher at 60.34 per barrel. - PTI

Rupee below trading range

The rupee traded in a narrow range between 71 and 71.5 against the dollar over the past week. The decline that began in the early part of August was halted due to easing market sentiment following a statement from the US trade representative. After trading in a range, the currency weakened on Tuesday, and closed with a loss of 0.4 per cent at 71.71. Will the rupee break further, read here

Stocks in focus

The board of Procter & Gamble Hygiene and Health Care will meet on Wednesday to consider financial results for the financial year ended June 30, 2019, and to recommend dividend, if any. The personal care products major had reported an 8 per cent increase in net profit at ₹90 crore for the third quarter ended March 31, and 23 per cent rise in sales at ₹699 crore. Shareholders will closely follow the numbers, as most FMCGs had reported weak numbers.

SeQuent Scientific on Tuesday said that its wholly-owned subsidiary SeQuent Research (SRL) has received establishment inspection report from the USFDA for its analytical services laboratory at Bengaluru. SRL has another USFDA-approved analytical laboratory at Mangaluru, which has been providing services since 2008. The Mangaluru laboratory was inspected by the USFDA in December 2018. Shareholders will closely monitor the development.

Sun Pharma Advanced Research Company has said that Abraxis Biosciences LLC has filed a complaint against the company in the US District Court (New Jersey).  It has alleged that SPARC’s filing of the New Drug Application for Taclantis injection (Paclitaxel Injection Concentrate for Suspension) is an act of infringement of the orange book listed patents for Abraxane. “SPARC believes that this lawsuit is without merit and will vigorously defend against these allegations.”

Opening bell

The 30-share BSE index Sensex opened 29.28 points lower at 37,298.73 against the previous close of 37,328.01. Similarly, the 50-share NSE index Nifty opened 10.35 points lower at 11,006.65 against the previous close of 11,017.

Today's Pick

We recommend a buy in the stock of Max Financial Services at the current levels of Rs. 439.7. The stock has been in a sideways consolidation phase in a wide range between ₹360 and ₹465 since October 2018. Within this sideways movement, a significant support at ₹400 had been providing base for the stock over the past two months.

The short-term outlook is bullish and the stock can test the upper boundary in the upcoming sessions. Read our stock recommendation and stock activity of Max Financial Services here

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