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Sensex crashes 541 pts, Nifty ends at 7812; metals bleed


TheNewsInternational Team

3:30 pm Market closes:

Dragged by sharp sell-off, the market has ended with losses. The Sensex plunged down 541.14 points or 2.1 percent at 25651.84. The Nifty crashes 165.10 points or 2.1 percent at 7812. About 977 shares have advanced, 1712 shares declined and 107 shares were unchanged.

Vedanta, Hindalco, Coal India, Tata Motors and L&T were major laggards.

3:20 pm How will market pan out?

Siddharth Bhamre of Angel Broking said this remains a sell-on rise market. Short-covering rally can remain elusive for a while and advises investors to remain guarded. He thinks 7900 is technically the support level for Nifty. Fundamental expert Dipan Mehta says if earnings disppoint in this quarter, then we will be in bear market. “A lot of course depends on the Reserve Bank commentary,” he said.

3:10 pm More weakness in offing?
Jai Bala of 1857 Advisors is not surprised by the ferocity of the fall. “I was saying the market has to print 8093 to indicate that the bottom is in and I wanted it to print before September 18. That hasn’t happened so the market is telling us that there is one final low that is pending for the correction to complete.” He says that final low will be somewhere around 7480 on the Nifty. “So the market has probably started its final descent of this correction.” 

3:00 pm Weak US opening likely?:
Wall Street shares were tipped to open lower today, with uncertainty about the timing of US interest rate rises and China’s economic outlook weighing on sentiment.

After a dovish statement from the US Federal Reserve last week, recent comments from Fed officials suggest the central bank could lift rates before the end of the year.

2:50 pm Market update: Equity benchmarks extended losses in last hour of trade. Selling in HDFC, L&T, Reliance Industries, ICICI Bank and Tata Motors indicated that there may have been selling by FIIs.

The Sensex dropped 525.42 points or 2.01 percent to 25667.56 and the Nifty fell 170.75 points or 2.14 percent to 7806.35.

About 876 shares have advanced, 1696 shares declined, and 111 shares are unchanged on the BSE.

2:40 pm FII View: Assuaging investor concerns, Robert Parker, Head Strategic Advisory Group, Credit Suisse Asset Management says that the sudden sell off seen in European and India markets is basically because of the confusion on what the Fed has done and is likely to do with regards to interest rates.

This lack of action by the Fed basically confused participants that maybe Fed knows something they don’t and so, it was inevitable that one would see short-term volatility.

Moreover, there have been four statements by Fed governors that US interest rates will likely go up by end of the year, adding to the confusion.

However, he is confident that this negative move by markets is not more than a three month bear market.

He is also certain that India will outperform other emerging markets like Brazil, Indonesia which have been bogged down by poor economic data. India according to him is a clear beneficiary of lower commodity prices, which is likely to continue for some more time.

2:30 pm Oil drops: Crude oil prices fell today as traders took profit following a 3-4 percent upward swing in the previous session, with weak economic growth denting the demand outlook amid plentiful supplies.

Oil markets have seesawed since the beginning of the week, torn between data that points towards prices bottoming out after a more than 50 percent fall over the last year and a global glut that bearish analysts say will lead to further losses.

Traders also focused on the soon-to-expire front-month contract in the West Texas Intermediate (WTI), which serves as the US benchmark. WTI’s October contract will go off the NYMEX board after Tuesday’s settlement, and November will move up as the front-month.

US West Texas Intermediate (WTI) crude futures were trading at USD 45.69 per barrel, down 2.12 percent. Globally traded Brent futures were at USD 48.18 per barrel, down 1.51 percent.

2:25 pm Gold weak: Tracking a weak trend overseas and slackened demand from jewellers, gold continued its slide for the second day as prices fell by another Rs 150 to Rs 26,510 per ten gram at the bullion market today.

Silver also slipped below Rs 36,000 level by falling Rs 170 to Rs 35,830 per kg on reduced offtake by industrial users and coin makers.

Traders said weak global cues amid speculations that US interest rates may still increase before the year-end as Federal Reserve officials sought to ease concern over the health of the economy, eroding haven demand, mainly dampened sentiments here.

Globally, gold prices fell 0.57 percent to USD 1,133.40 an ounce in New York in yesterday’s trade. Besides, subdued demand from jewellers and retailers too kept pressure on gold prices, they said.

In the national capital, gold of 99.9 and 99.5 percent purity plunged by Rs 150 each to Rs 26,510 and Rs 26,360 per ten gram respectively.

2:20 pm New IPO: Ashok Leyland, India’s second-largest commercial vehicle maker, plans to list its financing arm in the second half of next year and could raise up to RS 650 crore, a source familiar with the matter said.

Ashok Leyland, part of the Hinduja Group, is seeking a valuation of Rs 4000 crore for Hinduja Leyland Finance Ltd and has appointed five bankers to manage the issue, the source told Reuters.

The source declined to be named as the plan is not yet public.

2:10 pm Rupee check:  The Indian rupee slipped to day’s low as it trimmed its initial gains. It is trading at 65.76 per dollar in the afternoon trade.

It opened with marginal gains of 5 paise at 65.67 per dollar against Monday’s close of 65.72.

Ashutosh Raina of HDFC Bank said, “Some overnight comments from Fed officials have kept the hopes of a Fed hike later this year alive, and reassured markets about global growth.”

“The FOMC holding rates in the recent policy resulted in EM currencies gaining against the dollar with the USD-INR currency pair settling below the psychological 66/dollar figure. The pair is expected to trade in the 65.50-66/dollar range in the short term,” he added.

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Amidst steep global sell-off, Indian market tumbles sharply. The Sensex is down 437.10 points or 1.7 percent at 25755.88. The Nifty tanks 139.70 points or 1.7 percent at 7837.40. About 1021 shares have advanced, 1487 shares declined, and 117 shares are unchanged.

Banks, metals, capital goods and auto stocks are bleeding with major losers like Vedanta, Hindalco, NTPC, L&T and Tata Motors.

European stocks extended losses on despite a US bounceback as investors tread cautiously in the wake of the Volkswagen emissions scandal and last week’s decision by the US Federal Reserve to hold interest rates.

Volkswagen shares plunged 4.3 percent on the continuing controversy over its emission tests. The company’s stock fell more than 20 percent Monday on news it could face an USD 18 billion fine in the US for rigging emission tests on its diesel vehicles.

China’s Shanghai Composite index trimmed gains into the final minutes of trading, but strengthening blue chips such as banking and property counters still pulled the bourse up nearly 1 percent.

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