Auto, banking stocks slide in a jittery market

The benchmark indices continue to be battered this afternoon by rising concerns of a slowdown in China, lingering uncertainty in Greece, mounting turmoil in global markets and volatility in oil and rupee.

At 12.45 pm, the Sensex was at 27,226, weaker by 380 points or 1.3% and the Nifty was at 8,255, down 117 points. All the sectoral indices are trading in the red, with autos and banking indices losing more than 2% each.

The broader indices also received a hammering in line with their largecap counterparts, with the midcap and smallcap indices losing 1.3% each at 11,173 and 11,508 respectively. The BSE market breadth is weak, with 612 advancing stocks as against 1,895 declines.

CHINESE TROUBLES

The Caixin Chinese Purchasing Manager’s Index — a signal of China’s economic health — showed that manufacturing activity in August slowed to a six-and-a-half-year low.

GREECE WOES

Uncertainty has reared its head yet again in Greece as PM Alexis Tsipras has resigned and called for fresh elections, after his bailout package met with intense opposition from lawmakers.

GLOBAL MARKET TURMOIL

Asian stocks tumbled to the lowest level since February 2014 on deepening concerns that a slowdown in China, the world's second-biggest economy, could drag on global growth. China slipped by more than 2% in wake of the manufacturing data. Nikkei and Taiwan have shed more than 3% each, while Jakarta and Kospi have lost around 25 each. In fact, four major indices - Kospi (Korea), Taiwan, Hang Seng (Hong Kong) and Straits Times Index (Singapore) are trading at 52-week lows.

OIL

Oil headed for its eighth straight weekly decline in Asia today, as sharp falls in equities added to worries lacklustre global economic growth will hurt energy demand in an oversupplied market. The US benchmark West Texas Intermediate (WTI) for October delivery lost 49 cents to $40.83 a barrel in late-morning trades, while brent crude for October tumbled 56 cents to $46.06 a barrel. The WTI September contract closed 34 cents higher at $41.14 in New York yesterday, scraping off recent six and a half year lows.

RUPEE

The rupee weakened by 35 paise to trade at fresh two-year lows of 65.85 against the dollar in wake of descending Chinese currency Yuan. The rupee's fall is the lowest since September 6, 2013, when it had hit 66.29/dollar.

SECTORS AND STOCKS

All the sectoral indices are trading in the red, with autos and banking indices losing more than 2% each.

In the auto space, Tata Motors has fallen to 18-months lows of Rs 328, down more than 2%, exiting the Rs 1 lakh crore market-cap club in the process. Among other auto stocks, Bajaj Auto, Hero Motocorp, M&M and Maruti have shed 1-4% each.

The PSU banks are facing selling pressure for the third straight trading session on concerns that payment banks pose a risk to public lenders' market share. SBI, Canara Bank, Central Bank of India, Allahabad Bank, Bank of India, Union Bank of India, Bank of Baroda and Oriental Bank of Commerce are down 3-4% each on the BSE. Among the private sector banking names, HDFC, Axis Bank and ICICI Bank have lost around 25 each.

Metal stocks also continue to exhibit weakness on fears of demand slowdown from China, the world's largest consumer of metals, on the back of sluggish factory growth. Hindalco, Vedanta and Tata Steel are down around 2% each.

Oil stocks are also trading lower after global crude oil prices extended losses on concerns that global economic growth slowdown would hurt demand. Reliance Industries, ONGC and GAIL are down around 1% each.

Infosys and Hindustan Unilever are the only two Sensex-50 stocks to withstand the general rout.