Market slips on oil spills: Sensex crashes 642 points, Nifty near 10,800-level

Closing bell

The 30-share BSE index Sensex slumped 642.22 points or 1.73 per cent to close at 36,481.09. Similarly, the broader index Nifty ended at 10,817.60, lower by 185.90 points or 1.69 per cent. The rising crude oil prices, following the drone attack on Saudi Arabia oilfields, make the investors cautious.

Global brent crude was down 36 cents, or 0.5 per cent, at $68.66 a barrel at 0930 GMT, and West Texas Intermediate was down 57 cents, or 0.9 per cent, at $62.33 a barrel. Earlier, the crude benchmarks both fell by around 2 per cent.

The stocks of Hindustan Unilever, Asian Paints, and Infosys alone were the gainers in the top-30 stocks at the BSE index. The stocks of Hero MotoCorp, Tata Motors, Axis Bank, Tata Steel, and Maruti emerged the biggest losers. Among the sectoral indices, the realty and auto stocks were the top losers, falling over 3 per cent.

In the 50-share NSE index, the stocks leading the positive pack were GAIL, Titan, Hindustan Unilever, UPL and Yes Bank while the top stocks on the negative zone were Hero MotoCorp, Axis Bank, Tech Mahindra, Maruti and Cipla. - With inputs from agencies

India Ratings on power sector

Ind-Ra expects the power demand to remain at 6-7 per cent

India Ratings & Research has maintained a stable-to-negative outlook on the power sector for the remaining FY20, despite an increase in electricity demand and a rise in thermal plant load factor. Ind-Ra expects the power demand to remain at 6-7 per cent despite the likelihood of slowing demand. Read India Ratings' outlook on power sector here

European markets

Trading in Europe's main indexes was light after starting the week on a sluggish note. File Photo

Trading in Europe's main indexes was light after starting the week on a sluggish note following the attacks. Investors were also on the fence ahead of a US Federal Reserve policy meeting, where it is expected to cut interest rates for the second time this year. The European healthcare, utilities, real estate and food and beverage indexes - commonly considered the defensive sectors - posted some of the biggest gains on STOXX 600. Click here to read more on the European stock markets

Emerging economies vulnerable to big oil price moves

Given weak consumer demand, higher oil prices can result in stagflation in an emerging economy like India, which imports more than 70 per cent of its oil needs, says a report. According to the Japanese financial services major, when the rise in oil prices is driven more by supply-side factors — as is the case currently — it tends to be more damaging to large net oil importers. Read Nomura's view on the impact of oil price moves on emerging economies

Trading Call: BPCL

Chennai, 20/07/2013: For City:A view of the Bharat Petroleum Corporation Limited at Tondiarpet in Chennai. Photo:B_Jothi Ramalingam.

The stock of Bharat Petroleum Corporation Limited (BPCL), after surging from ₹329.3 to ₹408.5 in last three weeks posted a strong gain of 24 per cent. However, this week the stock is witnessing huge selling pressure as crude oil price flared up due to geopolitical tensions in the middle east that happened over the weekend. Read the stock activity of BPCL here

Technical Analysis - Crude oil

On Tuesday, crude prices continued to stay at higher levels File Photo

Following the drone attack on Saudi Arabian oilfields on Saturday, crude oil prices are once again on the boil. On Tuesday, crude prices continued to stay at higher levels; Brent crude is currently trading at $69. At $68, the commodity seems to have formed a new base, indicating persistent buying interest in the commodity. How far can prices go? Where are the resistances? Find out more on the crude oil futures and price

Sensex, Nifty slump over 1.5 per cent

The 30-share BSE index Sensex slumped 1.57 per cent or 584.38 points to 36,538.93 on the rising global crude oil prices. Similarly, the 50-share NSE index Nifty was trading 1.52 per cent or 167.50 points lower at 10,836.

Barring, Hindustan Unilever and Asian Paints, all the top-30 stocks in the BSE index were trading in red. The major losers leading the negative pack were Hero Motocorp, Axis Bank, Maruti, IndusInd Bank and State Bank of India. Sectorally, the stocks of realty, auto, bank, finance and telecom were trading over 2 per cent lower.

In the broader index, the top gainers were GAIL, Titan, Hindustan Unilever, UPL and Yes Bank while the laggards were Hero MotoCorp, Axis Bank, Tech Mahindra, Maruti and Cipla.

Tata Power sells stake in Cennergi

Tata Power has sold its entire 50 per cent stake in Cennergi, a South African joint venture, for $106 million. Cennergi Ltd is a 50:50 joint venture between Exxaro Resources Ltd. and Khopoli Investments Ltd., a wholly owned subsidiary of The Tata Power Company Ltd. Exxaro is a leading South African coal producer. Post this transaction, Exxaro will have 100 per cent ownership of Cennergi, Tata Power said in a filing to the exchanges.

The stocks of Tata Power were trading 0.62 per cent lower at Rs 63.95.

Hero MotoCorp announces VRS

Hero Motocorp has launched the VRS at a time when the industry is going through an unprecedented slowdown

Two-wheeler market leader  Hero MotoCorp  on Monday said it has commenced a Voluntary Retirement Scheme (VRS) for its employees with an objective to improve productivity and efficiency. The scheme — which will be valid till September 28 — is applicable for employees who age 40 years and above, and have completed a minimum of five years of continuous service at Hero MotoCorp. Click here to read more on the VRS announced by Hero MotoCorp .

The stocks of Hero MotoCorp were trading 4.84 per cent lower at Rs 2,607

Will exports look up?

India’s exports touch a 41-month low

Soon after India’s exports touching a 41-month low was announced, the government made the right move by ticking all the boxes of industry requirements; the details, however, would be in the fine-print. The much-disputed MEIS (Merchandise Exports from India Scheme), considered incompatible by the WTO, will get replaced next year with the widely-agreed proposal to provide rebates on inputs. Read the Opinion on the hits and misses in the latest booster pack

Broker's Call

Motilal Oswal

PI Industries (Buy)

CMP: ₹1,262.05

Target: ₹1,459

PI Industries  has acquired Isagro Asia for ₹3.5b at a valuation of about 15x P/E FY19. PI Industries should derive synergies from the acquisition in custom synthesis & manufacturing (CSM) and in the domestic formulation business. Read our Broker's Call for PI Industry here

MCX-Crude

Global crude oil prices skyrocketed on Monday following an oil processing facility and a nearby oil field in Saudi Arabia with a capacity of 5.7 million barrels a day, accounting for nearly 5 per cent of global output, coming under drone attacks over the weekend. Traders can approach with bullish bias and initiate long positions on pull-backs with the stop-loss placed below ₹4,200. Read our Commodity Call for MCX-Crude here

Indices drop over 1%

The 30-share BSE index Sensex dropped 1.06 per cent or 394.18 points to 36,729.13, meanwhile the broader index Nifty was trading at 10,897.50, lower by 106 points or 0.96 per cent. The rising crude oil prices, following the drone attacks on Saudi Arabia oilfields on Saturday, was the major reason for the indices to slump as the investors felt the attack could hurt the economy.

Saudi Arabia on Monday assured the Oil Ministry that there would no shortage of oil supply to India. Ministry of Petroleum and Natural Gas is closely monitoring the situation in consultation with Indian refiners and Saudi Aramco,” a statement said.

Top gainers in the Sensex pack were Hindustan Unilever, Asian Paints, Yes Bank, Vedanta and ONGC while the major losers were Hero MotoCorp, Axis Bank, Tech Mahindra, Bharti Airtel and Maruti.

In the Nifty index, the top stocks lending support to the index were GAIL, Titan, Asian Paints, UPL, and Hindustan Unilever while the laggards were Hero MotoCorp, Axis Bank, Tech Mahindra, Bharti Airtel and Cipla.

Nifty Call

The CNX Nifty logo is displayed on a glass 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 is biased towards declines. However, the India VIX, volatility index has gained 3.6 per cent to 15.5 levels. Most of the sectoral indices are hovering in the negative territory. The Nifty Auto index has fallen 1.45 per cent and is the biggest loser. The Nifty September futures contract began the session in negative territory, with a gap-down open. Here's our Nifty Call for September futures

One more booster shot

File Photo of Union Finance Minister Nirmala Sitharaman.

The government is likely to come out with the fourth set of booster shots this week to arrest the slowdown in the economy. Since August 23, three booster packages have been announced. The first focussed on the automobile sector and a further easing of the business environment, including a rollback of the surcharge on tax on foreign portfolio investors. The second one related to amalgamation of 10 banks and a ₹50,000-crore recapitalisation package, while the third was oriented to help the housing and export sector. Read more on the booster packages to be announced by the government here

Why has Equitas Holdings taken a knock?

On Monday, Equitas Holdings---the holding company of Equitas Small Finance Bank—fell by a sharp 13-odd per cent. Currently, the stock is trading 0.69 per cent lower at Rs 101.40.

In a bid to ease the pain for existing shareholders of Equitas Holdings--- on account of listing of the banking subsidiary through the IPO route--- the board had approved a scheme of arrangement in Jan-Feb this year wherein shareholders of Equitas Holdings are issued shares in Equitas Small Finance Bank in proportion to their holding in Equitas Holdings by capitalising the free reserves of the bank. The company has been awaiting SEBI's approval on this arrangement, and had also sought an extension from the RBI on the listing deadline. Read our analysis on why the stocks of Equitas Holdings slumped

Gold and precious metals

Gold may test towards $1,455 if Fed disappoints. File Photo

Gold traded steady as most traders stayed on the sidelines ahead of a widely expected rate cut by the US Federal Reserve later this week. Spot gold was little changed at $1,497.98 per ounce, as of 0359 GMT, after rising as much as 1 per cent in the previous session on intensifying tensions in the Middle East. US gold futures were down 0.4 per cent at $1,505.4 per ounce. Read more on the gold and other precious metals price here

Sensex slips 300 points

The 30-share BSE index Sensex slipped 303 points or 0.82 per cent to 36,819.33. Similarly, the broader index Nifty was trading lower by 90.30 points or 0.82 per cent at 10,913.20.

Broker's call

Emkay Global

United Spirits (Sell)

CMP: ₹609.45

Target: ₹560

Pernod Ricard’s FY19 results indicate stronger growth in India compared with  United Spirits,  which has continued to gain market share. Pernod’s India sales grew at 14 per cent and 20 per cent in FY18 and FY19 (July-June) versus United Spirits’ P&A sales growth of 10 per cent and 13 per cent, respectively. This points to market share losses for United Spirits in the P&A portfolio. Read the Broker's call on United Spirits here

Commodities market

A gauge of oil-market volatility on Monday rose to the highest level since December of last year. File Photo

Oil fell more than 1 per cent as the market hung on tenterhooks following attacks on Saudi Arabian crude facilities that cut the kingdom's production in half and sent prices soaring by the most in decades. Brent crude was down 77 cents, or 1.1 per cent, at $68.25 a barrel by 0051, while West Texas Intermediate was down 82 cents, or 1.3 per cent, at $62.08 a barrel. Crude prices surged by nearly 20 per cent on Monday as they responded to Saturday's attack, the biggest jump in almost 30 years, before closing around 15 per cent higher. Click here to read the commodities market report here

US stock markets

Energy stocks spike. File Photo

Energy stocks spiked while most of Wall Street fell after weekend attacks on Saudi Arabia's oil facilities added to investors' concerns about geopolitical risk and a stumbling global economy. The S&P 500 energy index, a gauge of one of the worst performing sectors so far this year, soared 3.3 per cent, its largest one-day gain since January. Shares of Apache Corp , Helmerich and Payne and Cimarex Energy jumped between 12 per cent and 17 per cent and led gainers on the S&P 500. Click here to read the US stock markets report

Shares dip as crude surge seen hurting economy

Shares edged lower for a second straight session on fears that a surge in crude prices following attacks on Saudi oil facilities could hurt the economy further. Energy stocks were down in early trading, even as oil prices shed some of their massive gains after the United States flagged the possible release of crude reserves.

The broader NSE index was down 0.76 per cent or 83.45 points at 10,90.05, while the benchmark BSE index was 0.73 per cent or 271.52 points lower at 36,851.79. The rupee weakened 0.22 per cent to 71.76 against the dollar.

Investors in other Asian markets were also on the sidelines ahead of an expected interest rate cut from the US Federal Reserve on Wednesday. With the threat of military action over the attacks keeping crude prices elevated, emerging markets such as India - the world's third-biggest importer of oil - will remain under pressure.

India's current account and fiscal deficit could take a hit if oil prices continue to rise after the attack, central bank chief Shaktikanta Das said on Monday. “The jump in crude could affect recovery in the economy, which is hurting from a growth slowdown,” said AK Prabhakar, head of research at IDBI Capital in Mumbai.

Oil marketers extended losses to a second day, with Indian Oil Corporation Ltd and Bharat Petroleum Corporation Ltd shedding 1.4 per cent-2.1 per cent.

Indiabulls Housing Finance Ltd slid 3.4 per cent on a report that the central bank had intensified its checks on the mortgage lender and Lakshmi Vilas Bank, which plan to merge, after fresh accusations of wrongdoing and the sudden exit of the bank's chief executive officer. Lakshmi Vilas Bank shares fell 4.4 per cent.

Trading companies MMTC Ltd and State Trading Corporation of India Ltd plunged between 17 per cent and 18 per ent after a newspaper reported that the government was planning to shut down the companies.

The Nifty IT index, which tracks software companies, fell 0.7 per cent. Meanwhile, miner Vedanta Ltd climbed 2.5 per cent to its highest in nearly seven weeks, and was the top gainer on both indexes. - Reuters

Rupee market

The Indian rupee on Monday had closed at 71.60 against the US dollar. File Photo

The rupee opened on a cautious note and fell 28 paise to 71.88 against the US dollar in early trade amid rising demand for the US dollar vis-a-vis other currencies overseas. Forex traders said the  drone attacks on Saudi Arabia’s oil facilities  have enthused demand for safe heaven assets like the US dollar.

Forex traders said weak opening in domestic equities and unabated foreign fund outflows also weighed on the domestic currency. Read more on the local currency market here

Forex market

File Photo

Reactions among major currencies were more muted, with the yen and the Swiss franc quickly giving up early gains made on Monday on knee-jerk safe-haven buying. Against the yen the dollar traded at 108.11 yen, just below last week's high of 108.265, its highest level since August 1. Click here to read more on the forex market

Sensex falls over 100 points

Domestic equity benchmark BSE Sensex dropped over 100 points in early session, dragged by banking, energy and IT stocks, amid weak global cues.

The 30-share index was trading 144.05 points, or 0.39 per cent, lower at 36,979.26, while the broader Nifty fell 44.35 points, or 0.40 per cent, to 10,959.70. In the previous session, the BSE barometer settled 262 points, or 0.70 per cent, lower at 37,123.31, while the Nifty closed 79.80 points, or 0.72 per cent, down at 10,996.10.

Top losers in the Sensex pack in early trade on included Tech Mahindra, HCL Tech, Hero MotoCorp, Axis Bank, Bajaj Auto, HDFC, Bharti Airtel, M&M, TCS, Tata Motors, ICICI Bank and Maruti, falling up to 1.86 per cent. On the other hand, Vedanta, Yes Bank, Asian Paints, Tata Steel, ONGC, SBI and IndusInd Bank, rose up to 2.22 per cent.

On Monday, foreign portfolio investor sold shares worth a net of Rs 751.26 crore, while domestic institutional investors bought equities worth Rs 308.56 crore, provisional data showed.

Investor sentiment remained weak amid geopolitical uncertainties over the Saudi oil turmoil, US-China trade war and looming global economic slowdown, experts said. Market is now awaiting cues from the upcoming trade talks between China and the US as well as a much-anticipated policy meeting of the Federal Reserve, scheduled to begin later in the day.

Elsewhere in Asia, Shanghai Composite Index, Hang Seng and Nikkei were trading in the red in their respective late morning sessions, while Kospi was in the positive territory. On Wall Street, bourses ended on a negative note on Monday.

The rupee, meanwhile, depreciated 17 paise against its previous close at 71.77 in early session. Global oil benchmark Brent crude fell 0.93 per cent to 68.38 per barrel (intra-day). - PTI

Global markets

Chinese shares fell 0.85 per cent, while Australian shares were down 0.27 per cent on Tuesday.

While equity market losses have not been large, shaky investor confidence continued to support safe-haven assets, with gold edging higher and Treasury prices rising. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.6 per cent. Chinese shares fell 0.85 per cent, while Australian shares were down 0.27 per cent. Read the global stock markets report here

Early trade

The BSE index Sensex, after opening marginally higher, fell 56.63 points or 0.15 per cent to 37,006.68. The broader index Nifty too is trading in red at 10,991.80, lower by 0.11 per cent or 11.70 points. The bank and IT stocks are dragging the Sensex lower.

The top gainers in the Sensex pack are Vedanta, Asian Paints, Yes Bank, Tata Steel and ONGC while the laggards are HCL Technologies, Axis Bank, Tech Mahindra, HDFC and Hero MotoCorp. In the 50-share index, the stocks leading the positive pack are Titan, Vedanta, Yes Bank, JSW Steel and Tata Motors while the top losers are IBUL Housing Finance, HCL Technologies, UltraTech Cement, BPCL and Wipro.

Stocks in focus

The board of Bajaj Finance will meet on Tuesday to consider, inter alia, a proposal for raising of funds by way of qualified institutional placement, subject to regulatory/statutory approvals. Shareholders will be keen to know the quantum of funds the company plans to raise, the number of shares to be offered and the price at which those shares would be offered. The purpose of fund-raising and the response to the QIP will also attract investors’ attention.

The board of Balmer Lawrie & Co will meet on Tuesday to consider an issue of bonus shares. Shareholders would be interested to know the bonus ratio and the record date. Earlier in 2016, the PSU major had declared a bonus issue in the ratio of 3:1 (three shares for every one), and in 2013, it had rewarded its shareholders with a 3:4 (three shares for every four held) bonus issue. For FY19, Balmer Lawrie had posted a profit of ₹188.50 crore on revenues of ₹1,775.20 crore.

Dr Reddy’s Laboratories on Monday said it has launched over-the-counter Lansoprazole capsules, used for treatment of frequent heartburn, in the US market. The company has launched Lansoprazole delayed-release capsules USP in the strength of 15 mg in the US market, as approved by the United States Food and Drug Administration, Dr Reddy’s said in a BSE filing. Last week, Dr Reddy’s had announced the launch of Fosaprepitant for injection in the US.

Opening bell

The 30-share BSE index Sensex opened at 37,169.46, marginally higher by 46.15 points against the previous close of 37,123.31. While the 50-share NSE index Nifty opened 26.15 points lower at 10,977.35 against the previous close of 11,003.50

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:

₹2243 • HDFC Bank

₹827 • Infosys

₹239 • ITC

₹130 • ONGC

₹1210 • Reliance Ind.

₹284 • SBI

₹2149 • TCS

11017 • Nifty 50 Futures

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

Today's Pick

Jyothy Labs

We recommend a buy in the stock of Jyothy Labs at the current levels of Rs 158.9. The stock jumped almost 7 per cent accompanied by above average volume, decisively breaking above a key resistance at ₹150. The short-term outlook is bullish for the stock and it has potential to trend upwards and reach the price targets of ₹165.5 and ₹168.5 in the upcoming trading sessions. Read our stock recommendation of Jythoy Labs here

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