Taking cues from weakness in European stocks in early trade there and a sharp slide in US index futures, key equity benchmark indices in India extended intraday losses in afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit two-week low. Metal, mining and oil stocks led losses for key benchmark indices. The Sensex was currently off 222.42 points or 0.8% at 27,643.67. The broad market depicted weakness. There were more than two losers against every gainer on BSE. The BSE Mid-Cap index was off 1.88%. The BSE Small-Cap index was down 1.36%. The decline in both these indices was higher than the Sensex's drop in percentage terms.
Stocks fell across the globe as concerns over China's growth outlook persisted after the country's central bank further guided its currency lower today, 12 August 2015, a day after it roiled global markets with its decision to devalue the yuan by nearly 2% by shifting to a more market-driven rate. For Asia, a weaker yuan is expected to pressure other central banks in the region to devalue their currencies to keep their economies competitive against China's.
Closer home, India's rupee fell sharply against the dollar as China's move to devalue the yuan sparked fears of a global currency war. The partially convertible rupee was currently hovering at 64.885 against the dollar, compared with its close of 64.2075 during the previous trading session.
In the stock market, index heavyweight and housing finance major HDFC fell. Index heavyweight and engineering and construction major L&T dropped. PSU OMCs declined sharply. Cement stocks also fell.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 736.81 crore yesterday, 11 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 130.74 crore yesterday, 11 August 2015, as per provisional data.
At 13:16 IST, the S&P BSE Sensex was down 222.42 points or 0.8% at 27,643.67. The index fell 239.75 points at the day's low of 27,626.34 in afternoon trade, its lowest level since 29 July 2015. The index gained 17.24 points at the day's high of 27,883.33 in early trade.
The CNX Nifty was down 73.90 points or 0.87% at 8,388.45. The index hit a low of 8,381.30 in intraday trade, its lowest level since 29 July 2015. The index hit a high of 8,446.95 in intraday trade.
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The market breadth indicating the overall health of the market was quite weak. There were more than two losers against every gainer on BSE. 1,839 shares declined and 767 shares rose. A total of 106 shares were unchanged.
The BSE Mid-Cap index was down 215.99 points or 1.88% at 11,286.56. The BSE Small-Cap index was down 161.90 points or 1.36% at 11,757.14. The decline in both these indices was higher than the Sensex's drop in percentage terms.
Index heavyweight and housing finance major HDFC fell 1.12% to Rs 1,272.35. The stock hit high of Rs 1,285 and low of Rs 1,265.70 so far during the day.
Index heavyweight and engineering and construction major L&T lost 1.74% to Rs 1,766. The stock hit high of Rs 1,795.10 and low of Rs 1,765.60 so far during the day.
PSU OMCs dropped sharply. BPCL (down 5.63%) and Indian Oil Corporation (down 5.51%) declined.
HPCL tumbled 7.03%. HPCL's net profit jumped 3349.26% to Rs 1588.04 crore on 12.45% decline in total income to Rs 52034.17 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced after market hours yesterday, 11 August 2015. HPCL's average gross refining margin (GRM) in Q1 June 2015 stood at $8.56 per barrel, sharply higher than $2.04 per barrel in Q1 June 2014.
HPCL did not receive any subsidy from the Government of India (GoI) in Q1 June 2015 on sale of PDS kerosene and domestic LPG as against a subsidy receipt of Rs 176.95 crore in Q1 June 2014. HPCL received discount of Rs 218.25 crore on purchase of crude from ONGC in Q1 June 2015. This was much lower than discount of Rs 3608.69 crore which the company received from upstream companies on purchases of crude oil, PDS kerosene and domestic LPG in Q1 June 2014.
HPCL has accounted for Budgetary Support amounting to Rs 450.61 crore from GoI towards under-recoveries on sale of PDS SKO in Q1 June 2015. This was much lower than Budgetary Support from GoI amounting to Rs 2516.41 crore in Q1 June 2014.
Cement stocks declined. UltraTech Cement (down 2.48%), Shree Cement (down 2.68%), Ambuja Cements (down 0.43%) and ACC (down 0.82%) fell.
Grasim Industries was off 1.84% at Rs 3,648.80. Grasim Industries has exposure to the cement sector through its holding in UltraTech Cement.
Meanwhile, investors continue to watch the progress of the monsoon rains which will have a bearing on food prices and rural income. India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 11 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 9% below the Long Period Average (LPA) until 11 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 11% below the LPA in East & Northeast India, 9% below the LPA in Central India and 2% above the LPA in Northwest India until 11 August 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Among key macro economic announcements this week, the government is scheduled to unveil the consumer price index (CPI) data for the month of July 2015 and industrial production data for June 2015 at 17:30 IST today, 12 July 2015. The CPI inflation accelerated to 5.4% in June 2015 from 5.01% in May 2015. Industrial production rose 2.7% in May 2015, compared with a revised growth of 3.4% in April 2015.
The government will release data on inflation based on the wholesale price index (WPI) for July 2015 at around 12:00 noon on Friday, 14 August 2015. The WPI inflation continued to be in negative zone for the eighth straight month in June 2015. The WPI inflation stood at negative 2.4% in June 2015, unchanged from the level in May 2015.
In overseas markets, European stocks moved sharply lower today, 12 August 2015, as concerns over China's growth outlook persisted after the country's central bank allowed the tightly controlled yuan to slide even further. Key benchmark indices in UK, France and Germany were off 1.41% to 1.97%.
Asian stocks edged lower today, 12 August 2015, after China's central bank further guided its currency lower today, 12 August 2015, a day after it roiled global markets with its decision to devalue the yuan by nearly 2% in a surprise decision announced yesterday, 11 August 2015. Key indices in South Korea, Taiwan, Indonesia, Japan and Singapore were off 0.56% to 2.89%. A weaker yuan is expected to pressure other central banks in Asia to devalue their currencies to keep their economies competitive against China's.
In mainland China, the Shanghai Composite was off 1.06%. In Hong Kong, the Hang Seng index lost 2.68%.
Growth in Chinese industrial production slowed in July, according to official data released today, 12 August 2015, in a sign of additional economic sluggishness in the world's second-largest economy. Value-added industrial output in China rose 6% in July from a year earlier, slowing from a 6.8% year-over-year increase in June, data from the National Bureau of Statistics showed. Retail sales in China increased 10.5% in July from a year earlier, slowing from a 10.6% year-over-year increase in June.
Trading in US index futures indicated that the Dow could slide 123 points at the opening bell today, 12 August 2015. US stocks closed sharply lower yesterday, 11 August 2015, in the wake of a surprise devaluation of the yuan by Chinathe world's second-largest economy.
Meanwhile, Moody's Investors Service reportedly cut Brazil's credit rating to near-junk status yesterday, 11 August 2015, but said the country's investment grade status was safe for now.
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