Key benchmark indices continued trading with sharp losses in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex, was down 918.81 points or 3.33% at 26,672.33. The Nifty 50 index was down 297.40 points or 3.48% at 8,246.15. The Nifty held above the psychologically important 8,000 mark. The Sensex was trading below the psychologically important 27,000 mark. It had slipped below the 26,000 level at the onset of trading session.
Selling was triggered by the Union government's surprise move to withdraw currency notes with a denomination of Rs 1,000 and Rs 500, effective from Tuesday, 8 November 2016, midnight, in an attempt to crack down on black money.
Meanwhile, global financial markets sold off as the results of the US election were being called, with Asian stocks and US futures tumbling as Donald Trump pulled ahead in the race for presidency. The United States presidential elections of 2016 were held yesterday, 8 November 2016.
The broad market depicted weakness. There were more than 11 losers against every gainer on BSE. 2,321 shares fell and 202 shares rose. A total of 73 shares were unchanged. The BSE Mid-Cap index was currently down 5.02%. The BSE Small-Cap index was currently down 5.91%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
In overseas stock markets, Asian stocks slumped in volatile trading as investors await the outcome of the US presidential election, with early results showing Donald Trump capturing several states. In US, stocks finished in positive territory for a second straight day on Tuesday, 8 November 2016, as gains in the consumer goods, utilities and telecoms sectors led shares higher.
Trading in US index futures indicated that the Dow Jones Industrial Average could slump 641 points at the opening bell today, 9 November 2016, as Republican presidential nominee Donald Trump pulled ahead of Democrat Hillary Clinton in electoral votes. As on 12:15 IST, Hillary Clinton currently has 215 votes, and Donald Trump has 264. Candidates need at least 270 electoral votes to win.
Investors around the world are closely watching how the vote tally plays out in America, where Democrat Hillary Clinton and Republican Donald Trump vie for the White House. Clinton is viewed more favorably by Wall Street, as she is a well-known political entity who represents the status quo. In contrast, Trump is viewed more warily by investors due to his unpredictable behavior and his negative views on free trade. Investors fear a Trump victory could cause global economic and trade turmoil and years of policy unpredictability, discouraging the Federal Reserve from raising interest rates in December as long expected.
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Back home, FMCG shares tumbled on concerns that the government's crackdown on black money could hit retail consumption in the near term. Tata Global Beverages (down 8.29%), Marico (down 5.1%), Jyothy Laboratories (down 4.2%), Britannia Industries (down 3.66%), Godrej Consumer Products (down 3.3%), Colgate Palmolive (India) (down 3.09%), Hindustan Unilever (down 2.87%), Dabur India (down 2.54%), Nestle India (down 1.91%), Bajaj Corp (down 1.76%), Procter & Gamble Hygiene & Health Care (down 1.44%) and GlaxoSmithKline Consumer Healthcare (down 0.54%), edged lower.
Cement shares edged lower. UltraTech Cement (down 6.54%), Ambuja Cements (down 6%) and ACC (down 4.99%), edged lower.
Grasim Industries was down 2.81%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Hindalco Industries skidded 6.50% on equity dilution concerns after the company announced that board of directors will consider raising of funds by issue of equity related instruments.
Hindalco Industries announced during market hours today, 9 November 2016, that a meeting of the board of directors of the company is scheduled on 12 November 2016 to consider among other items, approval of raising of funds by issue of equity shares, global depository receipts/American depository receipts/, foreign currency convertible bonds/, fully convertible debentures/partly convertible debentures/ preference shares convertible into equity shares, and/or any other financial instruments convertible into equity shares (including warrants, or otherwise, in registered or bearer form) and/or any security convertible into equity shares, combination of any of the aforementioned securities by way of one or more public and/or private offerings, qualified institutions placement and/or on preferential allotment basis or any combination thereof or any other method as may be permitted under applicable law, subject to such approvals as may be required.
On the macro front, in a historical move that will add record strength in the fight against corruption, black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes, the Government of India decided that the five hundred and one thousand rupee notes will no longer be legal tender from midnight of 8 November 2016. The Government accepted the recommendations of the Reserve Bank of India (RBI) to issue two thousand rupee notes and new notes of five hundred rupees will also be placed in circulation. Notes of one hundred, fifty, twenty, ten, five, two and one rupee will remain legal tender and will remain unaffected by the decision. The Prime Minister said the steps taken by the Government would strengthen the hands of the common citizens in the fight against corruption, black money and counterfeit notes. Persons holding old notes of five hundred or one thousand rupees can deposit these notes in bank or post offices from 10 November 2016 onwards till 30 December 2016, the Prime Minister announced yesterday, 8 November 2016, evening.
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