Sensex hits lowest closing level in more than 20 months
Losses for public sector banks and index heavyweight Reliance Industries (RIL) led decline for key benchmark indices as selloff in global stocks pulled Indian stocks lower. The barometer index, the S&P BSE Sensex, lost 417.80 points or 1.71% to settle at 24,062.04. The 50-unit Nifty 50 index dropped 125.80 points or 1.69% to settle at 7,309.30. The Sensex and the Nifty cut losses in late trade after a steep slide in mid-afternoon trade triggered by a selloff in European stocks. The Sensex settled above the psychological 24,000 mark. Earlier, the Sensex alternately moved above and below the psychological 24,000 mark after falling below that mark in early afternoon trade. On closing basis, the Sensex hit its lowest level in more than 20 months. The Nifty hit its lowest closing level in more than 19 months.
The broad market depicted weakness. There were almost four losers against every gainer on BSE. 2,105 shares declined and 536 shares rose. A total of 138 shares were unchanged. Quite a few stocks forming part of the BSE Small-Cap index registered losses exceeding more than 5%. Among the BSE Mid-Cap constituents, top 30 losers registered losses ranging from 3.08% to 7.9%.
The BSE Mid-Cap index dropped 2.01%. The BSE Small-Cap index lost 2.04%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
Metal and mining stocks declined as copper prices fell in global commodity markets. Shares of oil exploration and production firms declined on slide in global crude oil price. Axis Bank edged lower ahead of the announcement of its third quarter results. Stock price of Maruti Suzuki India shed extended losses registered during the previous trading session triggered by a foreign brokerage raising concerns about the company's profit margins. Tata Motors dropped on concerns about China's economic slowdown.
In overseas stock markets, European stocks fell sharply as concerns over plummeting oil prices and worries over global economic growth continued to weigh. US stock index futures pointed at heavy losses for US stocks later in the global day. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 326 points at the opening bell today, 20 January 2016. Earlier during the global day, Hong Kong and Japan led decline in Asian stocks as Hong Kong dollar's decline against the US dollar weighed on markets across the region. In Hong Kong, the Hang Seng index dropped 3.82%. In Japan, the Nikkei 225 Average ended 3.71% lower.
Meanwhile, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) cut global economic growth forecast for 2016 and 2017. Global growth for 2016 is seen at 3.4% and 3.6% in 2017, the IMF said. The pickup in global growth is weak and uneven across economies, with risks now tilted toward the emerging markets, says the IMF's latest WEO update. Looking beyond the short-run forecasts, there are important risks to global growth outlook, which are particularly prominent for emerging market and developing economies and could stall global recovery. These risks relate mostly to the ongoing adjustments of the global economy, namely China's rebalancing, lower commodity prices, and the prospects for the progressive increase in interest rates in the United States, the IMF said.
The Sensex lost 417.80 points or 1.71% to settle at 24,062.04, its lowest closing level since 15 May 2014. The index lost 640.08 points or 2.61% at the day's low of 23,839.76.
The Nifty dropped 125.80 points or 1.69% to settle at 7,309.30, its lowest closing level since 30 May 2014. The index lost 193.60 points or 2.6% at the day's low of 7,241.50.
The total turnover on BSE amounted to Rs 3080 crore, higher than turnover of Rs 3062.84 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC lost 1.58% to Rs 309.15. The stock hit a high of Rs 314.60 and low of Rs 305.45 in intraday trade. ITC announces its Q3 December 2015 result on Friday, 22 January 2016.
Metal and mining stocks declined as copper prices fell in global commodity markets. Vedanta (down 7.34%), Tata Steel (down 2.52%), Steel Authority of India (Sail) (down 2.12%), National Aluminium Company (down 0.58%), Jindal Steel & Power (down 3.91%), Hindalco Industries (down 5.57%), NMDC (down 3.17%), Hindustan Copper (down 2.49%) edged lower. JSW Steel rose 3.64%. Hindustan Zinc was unchanged at Rs 138.50.
High Grade Copper for March 2016 delivery was currently off 0.58% at $1.966 per pound on the COMEX.
IT major Infosys shed 1.53% to Rs 1,121.65. The stock hit high of Rs 1,145 and low of Rs 1,116.60 in intraday trade.
HDFC dropped 1.51% to Rs 1,135.20. The stock hit high of Rs 1,144.35 and low of Rs 1,129.65 in intraday trade.
Adani Ports and Special Economic Zone slumped 5.53% to Rs 219.55. The stock hit high of Rs 230 and low of Rs 216 in intraday trade.
Banks stocks saw across the board slide. Among PSU bank stocks, Punjab National Bank (down 5.76%), Bank of Baroda (down 3.19%), Canara Bank (down 3.58%), IDBI Bank (down 4.66%), Bank of India (down 2.66%) and Union Bank of India (down 2.75%) dropped.
State Bank of India (SBI) dropped 5.13% to Rs 173.70. The stock hit a low of Rs 171.60 in intraday trade so far, which is 52-week low for the counter. The stock hit a high of Rs 180.80 in intraday trade.
Among private bank stocks, HDFC Bank (down 1.77%), Kotak Mahindra Bank (down 0.75%), ICICI Bank (down 2.03%), IndusInd Bank (down 3.24%) and Yes Bank (down 5.34%) declined.
Axis Bank fell 1.13% ahead of its Q3 December 2015 result today, 20 January 2016.
UltraTech Cement fell 1.13%. On a consolidated basis, UltraTech Cement's net profit rose 36.48% to Rs 545.92 crore on 4.39% rise in total income to Rs 6240.96 crore in Q3 December 2015 over Q3 December 2014. The result was announced during market hours today, 20 January 2016.
UltraTech Cement's sales volume increased by 7% on year-on-year basis in Q3 December 2015. The company said that though the cement prices remained subdued, the performance during Q3 December 2015 was encouraging, driven by operational efficiencies, judicious fuel mix and lower energy costs, resulting in lower operating costs. However, this benefit was partially offset by an increase in costs due to the District Mineral Foundation levy in terms of the provisions of the Mines and Minerals (Development) Amendment Act, 2015 and amendment to the Payment of Bonus Act.
UltraTech Cement expects cement demand to pick up in the near term. The government's focus on infrastructure development, housing sector, smart cities, roads etc., augurs well for the company, UltraTech Cement said.
Shares of oil exploration and production firms declined on slide in global crude oil price. Cairn India (down 3.19%), Oil India (down 0.53%) and ONGC (down 2.25%) edged lower. Lower crude oil prices would result in lower realization from crude sales for oil exploration firms. Crude oil prices declined on the prospect of Iranian oil adding to the global supply glut. Brent for March settlement was currently down 52 cents at $28.24 a barrel. The contract had risen 21 cents or 0.73% to settle at $28.76 a barrel during the previous trading session.
Index heavyweight Reliance Industries (RIL) lost 3.51% at Rs 1,007. The stock hit high of Rs 1,040.50 and low of Rs 990.50 in intraday trade. RIL's consolidated net profit jumped 38.7% to Rs 7290 crore on 23.9% decline in revenue to Rs 73341 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours yesterday, 19 January 2016. RIL's standalone gross refining margins (GRM) increased to a seven-year high at $11.5 per barrel in Q3 December 2015 from $7.3 a barrel in Q3 December 2014. Strong gasoline and naptha cracks, seasonal rebound in middle distillates cracks, robust demand growth and sourcing of advantageous crude helped boost refining margins, RIL said in a statement.
RIL Chairman and Managing Director Mukesh Ambani said that the benefits of low crude oil and energy prices for the company's downstream businesses clearly outweigh the impact of these factors on its upstream segment, reflecting in the record earnings for the quarter.
Shares of PSU OMCs also edged lower. BPCL (down 0.89%), HPCL (down 2.26%) and Indian Oil Corporation (down 2.65%) declined.
The Delhi government has reportedly hiked sales tax on petrol and diesel increasing prices of the two fuels by 96 paise and 53 paise per litre, respectively. Effective today, 20 January 2016, the Delhi government raised value added tax (VAT) on petrol to 27% from 25%, while VAT on diesel was increased from 16.6% to 18%. A pollution cess of Rs 0.25 per litre is also levied on diesel, report added.
Most auto stocks declined. Mahindra & Mahindra (M&M) (down 0.11%), Ashok Leyland (down 3.74%), Eicher Motors (down 1.54%), and TVS Motor Company (down 2.99%) declined. Bajaj Auto (up 0.43%) and Hero MotoCorp (up 0.21%) gained.
Tata Motors dropped 3.39% on concerns about China's economic slowdown. China is a key market for Tata Motors' British luxury car unit maker Jaguar Land Rover. China posted the weakest annual pace of growth in a quarter century, with a 6.9% expansion last year, data showed yesterday, 19 January 2016.
Car maker Maruti Suzuki India shed 3.4% to Rs 4,058.90, with the stock extending losses registered during the previous trading session triggered by a foreign brokerage raising concerns about the company's profit margins. The stock had lost 0.61% to settle at Rs 4,201.95 yesterday, 19 January 2016. The foreign brokerage has reportedly said in a research note that Maruti's recent price cuts on its premium crossover S-Cross by over Rs 2 lakh in order to gain traction in the market could adversely impact the company's profit margins.
Shares of power generation and power distribution companies edged lower. Torrent Power (down 0.75%), NHPC (down 2.84%), Tata Power Company (down 4.2%), NTPC (down 2.26%), Adani Power (down 3.47%), Power Grid Corporation of India (down 1.14%), Reliance Infrastructure (down 4.13%) and Reliance Power (down 4.26%) declined.
The Union Cabinet today, 20 January 2016, approved the proposal of the Ministry of Power for amendments in the Tariff Policy to ensure 24X7 affordable power for all. The amendments will ensure availability of electricity to consumers at reasonable and competitive rates, improve ease of doing business to ensure financial viability of the sector and attract investments, promote transparency, consistency and predictability in regulatory approaches across jurisdictions, according to a government statement. It will further facilitate competition, efficiency in operations and improvement in quality of supply of electricity.
Separately, the Cabinet Committee on Economic Affairs has given its approval for setting up of over 5,000 megawatts (MW) of Grid-Connected Solar PV power projects on build, own and operate basis. A capacity creation of 1,250 MW each is expected during four financial years from 2015-16 to 2018-19. The work will be implemented by Solar Power Developers (SPDs) with Viability Gap Funding (VGF) under the Jawaharlal Nehru National Solar Mission (JNNSM). The estimated requirement of funds to provide VGF for 5,000 MW capacity solar projects is pegged at Rs 5050 crore. The upper limit for VGF will be Rs 1 crore per MW.
Shares of state-run coal-mining giant Coal India lost 3.45% at Rs 297.95. The stock hit a high of Rs 308 and a low of Rs 292.10 in intraday trade.
The Sensex has fallen 2,055.50 points or 7.87% in this month so far (till 20 January 2016). The Sensex is off 5,962.70 points or 19.85% from a record high of 30,024.74 hit on 4 March 2015.