Key benchmark indices extended early losses and hit the day's low in morning trade, following heightened geopolitical tensions in the Middle East. The Nifty slipped below its 20 days simple moving average placed at 12,139.17.
At 10:17 IST, the barometer index, the S&P BSE Sensex tumbled 467.21 points or 1.13% at 40,997.40. The Nifty 50 index was down 138.5 points or 1.13% at 12,088.15.
Higher crude oil prices also dented market sentiment. In the commodities market, Brent crude for March 2020 settlement was up by $1.82 a barrel to $70.42 per barrel on concerns that escalating Middle East tensions may disrupt oil supplies.
India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). Higher crude prices also leads to a spike in domestic inflation.
The broader market corrected sharply. The S&P BSE Mid-Cap index was down 1.56% while the S&P BSE Small-Cap index was down 1.41%. Both these indices underperformed the BSE Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 392 shares rose and 1495 shares fell. A total of 103 shares were unchanged. In Nifty index, 5 stocks advanced while 45 stocks declined.
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Metal stocks tumbled as rising global tension could hamper demand for industrial metals. The Nifty Metal index slumped 2.14% to 2,787.35, extending losses to second session.
Tata Metaliks (down 3.41%), Hindustan Copper (down 3.32%), Jindal Steel & Power (down 2.59%), National Aluminium Company (down 2.41%), Steel Authority of India (down 2.36%), Hindustan Zinc (down 2%), Hindalco Industries (down 1.9%), Tata Steel (down 1.83%), Vedanta (down 1.55%) and NMDC (down 1.16%) were top losers in metal segment.
Stocks in Spotlight:
Bajaj Finance fell 0.90%. The company reported its business update for Q3 December 2019. Customer franchise as of 31 December 2019 rose 23.93% and stood at approximately 40.4 MM as compared to 32.6 MM in the same period last year. The company also acquired 2.5 MM new customers in December 2019. New loans booked rose 13.24% to 7.7 MM on YoY basis. The Assets under management (AUM) stood at approximately Rs 145,200 crore as of 31 December 2019 as compared to Rs 107,507 crore as of 31 December 2018, a rise of 35.06%.
Force Motors jumped 6.4% after the company announced robust sales numbers for the month of December 2019. Total domestic sales rose by 30.01% to 2,517 units in December 2019 from 1,936 units in November 2019. The figure was also up by 52.55% YoY from 1,650 units in December 2018.
Titan Company rose 1.58% to Rs 1157.55 after the company's jewellery division met its revised expectations for the Q3 quarter. The jewellery division witnessed revenue growth of 11% in Q3 December 2019, meeting its revised expectations for the quarter. The retail growth was actually much better at 15%. While the industry witnessed reasonable growth in the festive season, the company has done better which is evident in the market share gains.
"The general economic slowdown in the economy leading to poor consumer sentiment and lower walk ins has been a concern for the last few quarters. The company experienced different consumer responses in each of its divisions. Retail sales in jewellery were better than expected at the beginning of the quarter, possibly due to a good wedding season and reasonable inelasticity of wedding jewellery, but growth in Watches and Eyewear were difficult to come by. Sales in all divisions in the second half of December was also impacted to some extent due to forced store closures due to the protests in the North East and in many other parts of the country", Titan Company said.
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