Just as one thought that the NSE Nifty could keep the momentum going after closing above 4900, came a fresh wave of vicious selling. The Nifty plunged by over 100 points from the intra-day high. After opening above 4950 and hitting high of 4956, the Nifty entered into a tight trading range.
However, that narrow range didn’t hold on for long after Fitch Ratings downgraded Japan's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'A+' from 'AA' and 'AA-', respectively. Also, the Organisation for Economic Co-operation and Development (OECD) announced a cautious outlook for global economic growth.
In another jolt to the sentiment, the Indian Rupee plummeted to a new all-time low, sending shivers down the markets' spine. The Rupee hit record low as it depreciated above the 55 per US dollar mark for the second successive session, notwithstanding the RBI's fresh measures and positive remarks from a deputy governor. The rupee was seen hitting all time low of 55.44 per US Dollar.
The BSE Sensex ended at 16,026 losing by 1% or 157 points. It had earlier touched a day’s high of 16,366 and a day’s low of 16,000. It opened at 16,344.
The NSE Nifty settled at 4861 down by 46 points or 1%. It touched a day’s low of 4,849 and day’s high of 4,956.
Tata Power, Maruti, Sterlite, SBI, Hindalco, Sun Pharma, L&T, GAIL, DLF, HDFC Bank and NTPC were the notable losers on the Sensex and the Nifty today.
Tata Motors, TCS, BHEL and HDFC were the top gainers on the Sensex.
The INDIA VIX on the NSE gained by 2% to close at 24.39. It hit days high of 24.63. It hit a low of 22.60.
The market breadth was negative, 1565 stocks declined and 1082 stocks advanced.
The BSE Mid-Cap index slipped 0.6%, and the BSE Small-Cap index gained 0.7%.
Today’s fall was led by heavy offloading in Metals, Banking, Power, Realty, PSU and Capital Goods stocks. IT, Teck and Consumer Durables indices managed to escape the sudden selloff.
The Mid-Cap index and the Small-Cap index also came under pressure.
The BSE Metal index was the biggest loser, down 1.8% followed by Banking, Power and Realty index. On the other hand, BSE IT index was the top gainer, the index gained 0.5%, BSE Teck index gained 0.2% and Consumer Durables ended higher by 0.11%.
Technically, on the daily charts the Nifty has formed a Bearish Engulfing Pattern, indicating further selling in the coming days. On the other hand, on the weekly charts, the Nifty has fallen below the long-term declining trend line, which is another bearish breach.
The frontline Indian stock indices erased all of their gains in the afternoon trade and turned weaker after rising modestly over the last two sessions. Earlier, they had rallied in line with a worldwide rally in equities, led by Wall Street. Asian markets closed mostly higher today and the European indices also opened with a positive bias.
The rupee, which closed at a new record low versus the US dollar yesterday, recovered marginally this morning. However, the local currency too was unable to sustain the early bounce and soon fell below 55 per dollar.
Earlier, the rupee had recovered from a record low on the back of steps taken by the RBI to curb arbitrage.
RBI's deputy governor Subir Gokarn said that the central bank will continue to take steps to stabilise the rupee and said it expected dollar flows from exporters on Tuesday and Wednesday to convert half of their exporter earnings into the rupee.
"The risk-reward ratio for the Indian markets is still not favourable, though a technical rebound is not ruled out after a series of weekly losses. Stick to a stock-centric approach. Look for beaten down companies with sound fundamentals, clear earnings visibility and good management. Investors will now look forward to the informal EU summit on Wednesday and possible measures from the RBI to arrest the freefall in the rupee," says Amar Ambani, Head of Research, IIFL.
Stocks in the news:
ABB India rose 1.9% to Rs. 723.50 after it received a Rs.1.75bn order from NTPC to strengthen Western India's power grid.
After rising earlier, GAIL closed lower in a weak market at Rs. 313.95 down 2%. The stock had risen on news that the company and TurrnenGas plan to sign a deal to get natural gas through a pipeline.
Gitanjali Gems gained 0.6% to Rs. 311.40 after Chairman Mehul Choksi said he sees his jewelry business one day joining LVMH Moet Hennessy Louis Vuitton SA and Cartier among the biggest names in luxury products.
After rising to Rs. 593.85, JSW Steel finished down 2.7% at Rs. 593.85 in a weak market. The stock earlier moved up on news the company was looking to Rio Tinto’s Mozambique mine this year for fuel as weather and labour issues in Australia threatened to disrupt output expansion plans.
After rising to Rs. 656 on reports that the company was restructuring its 2-wheeler business to increase market share, Mahindra & Mahindra closed lower at Rs. 638.60, down 1.4% in a downbeat market.
After climbing to Rs. 63.50, on securing an order worth Rs.1.65bn from Kerala Water Authority, Shriram EPC closed at a new low of Rs. 55.20 in an unfavorable market scenario.
Thomas Cook India finished up 2.4% at Rs. 62.65 on news that its parent would sell 77% of its stake in Thomas Cook India stake to a subsidiary of Fairfax Financial.
Kalpataru Power Transmission lost 4.5% to end at Rs. 81.05 after its 4Q profit fell 7.8% on year to Rs. 567.5mn trailing estimates of Rs. 585mn.
Wockhardt surged 7.8% to Rs. 717.75 after the company's 4Q consolidated profit from operations before other income, finance costs and exceptional items surged 63.34% on year to Rs.4bn. Wockhardt reported a 4Q consolidated net loss of Rs.1.91bn versus a net profit of Rs.1.61 in the same quarter a year ago. The company reported an exceptional loss of Rs.4.5bn in Q4 March 2012.
Tata Communications lost 0.8% to finish at Rs. 201.30 after the company reported Q4 consolidated net loss of Rs.2.6bn versus net loss of Rs.1.56bn in the same period a year ago.
Power Finance Corporation settled at Rs. 149.35 up 0.8% after Q4 net profit rose 34.69% on year to Rs.8.18bn.
Akzo Nobel India ended at Rs. 879 up 1.8% after the company said its board has approved a buyback of approximately 1.3 mn equity shares from the minority shareholders at Rs. 920 per share.
Read more: