Carnage in global stocks triggered by British broadcasters announcing that the UK has voted to leave the European Union in a historic referendum dubbed "Brexit" ensured that Indian stocks continued to trade with deep losses. At 11:23 IST, the barometer index, the S&P BSE Sensex, was down 950.40 points or 3.52% at 26,051.82. The Nifty 50 index was down 299.80 points or 3.62% at 7,970.65. The Nifty was trading below the psychologically important 8,000 mark after slipping below that level in morning trade. The Sensex first fell below the psychologically important 27,000 and then below the next psychologically important 26,000 level. It later regained the 26,000 level.
In overseas stocks market, circuit filter caused trading halt after a steep slide in the Nikkei 225 Average in Japan. Trading in US index futures indicated that the Dow Jones Industrial Average could slump 684 points at the opening bell today, 24 June 2016.
Results announced so for in the Brexit referendum showed that the UK has voted to leave the EU. Britain's exit from the EU could destabilize the trade bloc. Britain has been a member of the trading bloc since 1973. Voting in the referendum was concluded in a single day yesterday, 23 June 2016.
The Sensex fell 1,057.69 points, or 3.92% at the day's low of 25,944.53 in morning trade, its lowest level since 26 May 2016. The index fell 634.74 points, or 2.35% at the day's high of 26,367.48 in early trade. The Nifty fell 331.85 points, or 4.01% at the day's low of 7,938.60 in morning trade, its lowest level since 25 May 2016. The index fell 212 points, or 2.56% at the day's high of 8,058.45 in early trade.
The broad market depicted weakness. There were almost 10 losers against every gainer on BSE. 1,954 shares fell and 197 shares rose. A total of 78 shares were unchanged. The BSE Mid-Cap index was currently down 3.05%. The BSE Small-Cap index was currently down 3.49%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
In overseas stock markets, Asian shares tumbled as investors scurried for cover with a referendum expected to show a majority of voters want the UK to leave the EU. In Japan, the Nikkei 225 Average was currently off 7.91%. Trading resumed after it was halted for a brief period as circuit breakers were applied after a sharp slide. The safe-haven yen surged against the dollar. A stronger yen hurts the competitiveness of Japanese exporters. The Japanese currency is perceived as a haven in times of global financial and global economic worries.
Trading in US index futures indicated a sharp setback for US stocks at the opening bell after reports signaled that the UK was on track to exit the European Union in a landmark vote that investors fear could destabilize the trade bloc. Trading in index futures indicated that the Dow Jones Industrial Average could slump 684 points at the opening bell today, 24 June 2016.
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Closer home, Minister of State for Finance Jayant Sinha reportedly told in an interview to a television channel that India is focusing on the market dislocations arising from a likely British referendum vote to leave the European Union. Meanwhile, Finance Minister Arun Jaitley said in a statement that Indian economy is well prepared to deal with the short and medium term consequences of Brexit. India is strongly committed to macro-economic framework with its focus on maintaining stability, Jaitley said. The finance minister said that India's macro-economic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline and declining inflation. He further said that India's immediate and medium-term firewalls are solid too in the form of a healthy foreign exchange reserves position.
Jaitley said that the Indian government, the Reserve Bank of India and other Indian regulators are well prepared and are working closely together to deal with any short term volatility. He said that the government will steadfastly pursue its ambitious reform agendaincluding early passage of the GSTthat will help India realize its medium term growth potential of 8-9%.
Stocks of companies involved in oil exploration and production activities fell as global crude oil prices dropped after reports signaled that the UK was on track to exit the European Union in a landmark vote that investors fear could destabilize the trade bloc. Cairn India (down 4.85%), ONGC (down 4.61%), Reliance Industries (RIL) (down 3.99 %) and Oil India (down 2.36%), dropped. Lower crude oil prices will result in lower realization from crude oil sales for oil exploration & production (E&P) firms.
Stocks of public sector oil marketing companies also declined. HPCL (down 2.48%), BPCL (down 2.23%) and Indian Oil Corporation (down 1.80%), edged lower.
Brent for August 2016 settlement was currently off $2.80 per barrel at $48.11 a barrel. The Brent August contract had risen $1.03 a barrel or 2.06% to settle at $50.91 a barrel yesterday, 23 June 2016.
Realty stocks slumped. Indiabulls Real Estate (down 10.56%), Unitech (down 10.33%), Housing Development and Infrastructure (HDIL) (down 8.12%), D B Realty (down 8.08%), Anant Raj (down 6.58%), DLF (down 6.41%), Prestige Estates Projects (down 5.05%), Parsvnath Developers (down 5.01%), Sunteck Realty (down 4.54%), Peninsula Land (down 4.52%), Oberoi Realty (down 3.85%), Sobha (down 3.54%), Phoenix Mills (down 3.15%), Godrej Properties (down 3.02%), Mahindra Lifespace Developers (down 1.7%) and Omaxe (down 1.47%), edgd lower.
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