Key benchmarks extended losses and hit fresh intraday low in mid-morning trade. Selling pressure emerged after the rupee dropped to a new low amid sustained foreign fund outflows and surging crude oil prices. Investors were also cautious ahead of the three-day Reserve Bank of India (RBI) policy review scheduled to begin Wednesday.
At 11:17 IST, the barometer index, the S&P BSE Sensex, was down 274.34 points or 0.75% at 36,251.80. The Nifty 50 index was down 85.85 points or 0.78% at 10,922.45. The Nifty dropped below the 11,000-level in early trade.
Among secondary barometers, the BSE Mid-Cap index was down 0.78%. The BSE Small-Cap index was up 0.49%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1343 shares rose and 900 shares fell. A total of 103 shares were unchanged.
Maruti Suzuki India was down 2.44%. The company today announced that its popular Eeco has crossed the milestone of 5 lakh sales. Designed to perform twin objectives of a being a brilliant family transport and a dependable business vehicle, Eeco has built a strong foothold across the country since its launch in January 2010.
Larsen & Toubro was down 1%. The company today announced that its buildings & factories business won a prestigious EPC order worth Rs 3036 crore from Bangalore International Airport Limited (BIAL) to construct Terminal-2 (T2) of the Kempegowda International Airport, Bengaluru. Once completed, the 255,000 sq. mt. Phase 1 of T2 will augment the capacity of the Airport by 25 million passengers per annum (MPPA).
Yes Bank jumped 6.64% on bargain after the steep declines in recent weeks. In a recent press update, the bank noted that it is fully geared for the MD & CEO's succession and pursuant to the board of directors meeting dated 25 September 2018, the two external experts of the search & selection committee will be finalized by 7 October 2018. The committee, assisted by a global leadership advisory firm, will evaluate both internal and external candidates and make suitable recommendations to the board of directors for onward submission to RBI.
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Over the past few days, some unfounded speculations regarding the bank's asset quality have been brought to its notice, according to the bank. In this context, the management clarifies that the asset quality continues to be stable and reiterated its credit cost guidance at 50-70 bps for FY19 (76 bps for FY18).
The bank has a liquidity coverage ratio of ~101% as on September 30, 2018, which is 11% points in excess of the minimum regulatory requirement of 90%. The Bank's average daily LCR for Q2 FY19 was ~100%. The bank's liquidity position will further benefit from the recent RBI measures (announced on September 27, 2018) to ease systemic liquidity which will take effect on October 01, 2018, noted the bank further.
MOIL gained 5.37% after the company said that it has fixed/revised prices of different grades of manganese ore and other products, effective from 1 October 2018. The announcement was made after market hours on Monday, 1 October 2018. Stock markets were closed yesterday, 2 October 2018 for local holiday.
MOIL said that in line with the business practice of fixing/revising prices Manganese Ore, the company has fixed/revised prices of different grades of Manganese Ore, effective from 1 October 2018. The prices of Ferro Grade, SMGR (Mn 30% & Mn 25%), Chemical Grade and Fines have been increased by about 10% on the existing prices prevailing since 1 September 2018. A discount of 10% will be offered on the prices effective from 1 October 2018 on specific grades of materials i.e. BGF534, DBL456 & BGL523 for dispatches during October 2018.
The basic price of Electrolytic Manganese Dioxide (EMD), has been increased by Rs 9000 PMT on the existing price prevailing since 1 July 2018. Ferro Manganese/ Ferro Manganese Slag and some identified grades of Manganese Ore will continue to be sold on e-auction basis as well as through Metal Mandi (M3) of MSTC.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.11, compared with its close of 72.91 during the previous trading session. Rupee hit a record low of 73.4175 against the dollar in early deals.
The RBI's Monetary Policy Committee (MPC) will meet between 3 to 5 October 2018 for the fourth bi-monthly monetary policy for 2018-2019. The resolution of the MPC will be unveiled at 14:30 pm on 5 October 2018.
Overseas, most Asia stocks declined. Markets in China and South Korea are closed for a public holiday.
In US, the Dow Jones Industrial Average hit a record high on Tuesday as it rallied for a second day, boosted by gains in Intel and optimism around global trade. Stocks were coming off strong gains from the previous session after Canada joined the US and Mexico in a new trade deal. The United States-Mexico-Canada Agreement, or "USMCA" for short, will see all three countries compromise on certain trade aspects. More market access will be granted to US dairy farmers, while Canada has agreed to effectively cap automobile exports to the States.
Trade war remains in focus for the markets. Following the new USMCA deal to replace the current North American Free Trade Agreement, eyes are now on Washington's ongoing trade fight with China. Investors will be looking to China, to see if Beijing and Washington can compromise on certain trade elements.
In the UK, the Conservatives' annual party conference was under way with Prime Minister Theresa May facing pressure over her proposal for future UK-EU relations, known as the Chequers plan, which has already been rejected by EU leaders. Any additional signs of political instability in Europe could weigh on the US, where multinational firms have a large amount of revenue exposure to the region.
Further in Europe, Italy last week unveiled a 2019 budget deficit target that has met stiff opposition from European Union officials, who say it will violate the bloc's fiscal rules. Italy's coalition government proposed a budget that would increase the deficit to 2.4% of gross domestic output in 2019, well above the initial target of 0.8% proposed by the country's previous centre-left government. The current target range for this year is 1.6%. The deficit blowout revived fears of the eurozone debt crisis and put pressure on the euro.
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