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Sensex, Nifty fall 3%; HUL outperforms, Brent below $53/bbl


The News International Team

02:58pm Euro zone PMI

The euro zone economy ended 2014 with its worst quarter for over a year as further price cutting failed to significantly drive up business activity, adding pressure on the European Central Bank to act, surveys showed.

Also of concern to policymakers, the surveys highlighted an ongoing downturn in France and Italy and only a stuttering performance in Germany, Europe’s largest economy.

“The weakness of the PMI in December will add to calls for more aggressive central bank stimulus, including full-scale quantitative easing, to be undertaken as soon as possible,” said Chris Williamson, chief economist at survey compiler Markit.

Markit’s final December Composite Purchasing Managers’ Index (PMI), based on surveys of thousands of companies across the region and seen as a good indicator of growth, missed an earlier flash reading of 51.7, coming in at 51.4, reports Reuters.

02:50pm Market Check

The 30-share BSE Sensex crashed 838.08 points or 3.01 percent to 27004.24 and the 50-share NSE Nifty lost 242.75 points or 2.90 percent to 8135.65.

About 645 shares have advanced, 2152 shares declined, and 475 shares are unchanged on the Bombay Stock Exchange. 

02:45pm FII View

The risk off trade in global markets manifests from Greek political uncertainity and fear of Fed tightening rates in mid 2015, says Hans Goetti, CIO at Banque Internationale Luxembourg.

Speaking to CNBC-TV18 about the correction in Indian equities, Goetti says it is part of consolidation for a market that has had a good run. But improving fundamentals make it an attractive destination for foreign investors, he says.

With crude seeing fresh lows, global sentiment were hurt resulting in sell-off in European and Asian markets today. Goetti says Saudi Arabia is determined to keep market share in an oversupply situation, which is why oil prices will stay on the lower side.The demand situation has not deteriorated much, and there would be many countries, like India, benefitting from it. Indian crude basket has fallen by USD 2.92 to USD 51.53/bbl.

02:41pm Market Update

The Sensex and Nifty marked biggest intra-day loss since September 3, 2013. All sectoral indices are in the red, falling in range of 1.2-3.3 percent while India VIX rose over 21 percent, trading at highest level since December 17.

HDFC Bank, ICICI Bank and Reliance Industries were top contributors to Nifty fall. ICICI Bank contributed over 200 points to Bank Nifty fall. ACC, GAIL, L&T and M&M were trading below 200-DMA.

Nikkei saw worst day of trade in last 10 months. Brent fell below USD 53 a barrel, the lowest level since May 2009.

02:35pm Godrej Consumer Products in focus

FMCG major Godrej Consumer Products today said it has fully acquired South Africa’s hair extensions firm Frika Hair (Pty) for an undisclosed sum in order to consolidate its position in the South African market.

In a BSE filing, GCPL said “it has entered into an agreement with Frika Hair (Pty) Ltd for the acquisition of 100 percent equity stake in its hair extensions business in South Africa.”

Commenting on the acquisition, GCPL Managing Director Vivek Gambhir said: “This acquisition reflects our continued commitment to scaling up our presence in Africa and providing African consumers with a wide range of superior quality products at affordable prices.”

02:30pm Market Update

The Sensex declined 720.55 points or 2.59 percent to 27121.77 and the Nifty plunged 208.70 points or 2.49 percent to 8169.70.

About 727 shares have advanced, 2033 shares declined, and 482 shares are unchanged.

02:15pm Interview

The total industry volume growth for the commercial vehicle (CV) industry in fiscal year 2015-16 will be better than the 10 percent expected this fiscal, believes Gopal Mahadevan, President –Finance and CFO, Ashok Leyland.

In an interview with CNBC-TV18, Mahadevan said the inventories for CV companies have gone down significantly and that he expects the fourth quarter to be better than the third quarter thanks to improving economic environment.

Ashok Leyland’s volumes were up 20 percent year-on-year and it outperformed the industry, he said, adding that its market share last year increased from 24 percent to 27.1 percent.

02:00pm Market Check

Equity benchmarks remained under selling pressure, tracking uncertainty over Greece, fears of likely global slowdown post steep decline in crude oil prices. The Sensex dropped 558.13 points or 2 percent to 27284.19 and the Nifty fell 161.40 points or 1.93 percent to 8217.

Saurabh Mukherjea of Ambit Capital is not perturbed by the global sell off, saying one must buy India on every dip due to major macro positives. The brokerage sticks to the Sensex target of 30000 by March 2015 and 36000 by March 2016.

The broader markets gained 1.5 percent each. Nearly three shares declined for every share advancing on the Bombay Stock Exchange.

Shares of ONGC, Tata Motors, HDFC, Tata Steel, Tata Power, Jindal Steel and NMDC topped the selling list, down 3-4 percent whereas HUL bucked the trend, up 2 percent.

Reliance Industries, Jet Airways, State Bank of India, Tata Steel, Gujarat State Petronet, ICICI Bank, Infosys, Tata Motors and ITC were most active shares on exchanges.

The rupee painted a picture of resilience, trading stronger at 63.34 a dollar versus a close of 63.41 in previous session.

Globally, Asian markets except Shanghai closed 1-3 percent lower while European markets were mixed. Nymex crude plunged below USD 50 a barrel to the lowest level in five-and-half-year as growth in oil supplies show no signs of abating with output in Russia hitting a record high in 2014.

In a clear sign of safe haven buying, the US 10-year bond yield dipped below the psychological 2 percent mark on widening anxieties about Europe’s economy and Greece possibly quitting the eurozone.

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