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Markets extended losses for the third straight day and ended over 1% down on Thursday, amid weak global cues, as institutional investors booked profit in blue chips. Further, the weakening rupee also weighed on market sentiment. A weak rupee will have material impact on inflation, current account and the fiscal deficits.
As capital inflows made the rupee depreciate against the dollar in recent days, Finance Minister P Chidambaram today said the government will take a call on further reforms in foreign direct investment (FDI) soon, while market watchdog Sebi will decide on easing procedures for foreign institutional investments.
The 30-share Sensex ended at 18,827 down 214 points or 1.12% and the 50-share Nifty ended at 5,699 down by 61 points or 1.06%. The Sensex and the Nifty reached an intra-day low of 18,766 levels and 5,683 mark, respectively.
On the global front, the Nikkei average tumbled 6.4% on Thursday, hitting its lowest close since April 3 - the day before the Bank of Japan unveiled sweeping stimulus to revive the economy - as investors further cut their long Japanese equities and short yen positions.
European shares sold off again on Thursday with banks and commodity stocks, sectors most exposed to the broader economic fortunes, the top fallers on concerns about stimulus unwinding and Greek political turbulence. CAC, DAX and FTSE are down 1-2%.
Back home, Government today revised the industrial output growth rate to 2.2% in April from 2% released yesterday after a correction in recording of production data for electricity.
Consumer Price Index (CPI) - based inflation, however, came down to 9.31% in May from 9.39% in April, government data showed on Wednesday.
Investors will now focus on Friday’s wholesale price inflation (WPI) data which is expected to remain in the central bank’s comfort level of 5 per cent. An easing inflation will provide RBI more elbow-room to reduce interest rates in the June 17 monetary policy review.
The rupee extended fall on Thursday following comments from the finance minister as he failed to announce any clear and strong measures to arrest the sharp decline in the rupee seen in recent weeks.
On the sectoral front, BSE Auto index fell by almost 3% followed by counters like Realty, Healthcare, IT, Power and PSU, all declining by 2%. However, BSE Consumer Durable index gained by over 1%.
From the auto space, Tata Motors, Bajaj Auto, M&M and Maruti Suzuki declined between 2-4%. Tata Motors was the top Sensex loser.
Sun Pharmaceutical Industries declined by over 3% after the company said it will pay a lump-sum of around Rs 3,100 crore ($550 million) to settle litigation over sale of the generic pantoprazole drug in the US.
IT majors like TCS, Infosys and Wipro slumped between 1-2%.
Other notable losers are GAIL, Tata Steel, BHEL, ITC and Coal India.
On the gaining side, Hindalco was the top Sensex gainer, up nearly 5%. Other notable gainers were Bharti Airtel and JSPL.
Meanwhile, BSE Midcap index slipped by 1.37% whereas BSE Smallcap index dipped by 1.06%.
The market breadth in BSE ended weak with 1,570 shares declining and 747shares advancing.
SMART MOVERS
Tata Coffee ended lower by 6.4% to Rs 1,029, extending its previous day’s fall, despite the company's clarification on fall in shares. The stock has fallen 26% in past two trading sessions on the Bombay Stock Exchange (BSE).
Jubilant FoodWorks plunged by 4.4% to Rs 992, extending 3.4% fall in past two trading sessions, after one of the promoter sold part of its stake through open market transaction.
Shares of select public sector undertakings (PSU) companies were under pressure, falling up to 12% after the government has fixes the floor price for stake sale of MMTC at huge discount.
Besides MMTC, State Trading Corporation of India, Dredging Corporation of India, Hindustan Copper, Andrew Yule and Company, HMT and ITI were down 3-12% on the Bombay Stock Exchange (BSE).
Shares of Punjab National Bank (PNB), Bank of Baroda (BOB), Jammu and Kashmir Bank and Monsanto India ended lower between 3-5% on turning ex-dividend today.
Apollo Tyres tanked 25.4% to Rs 68.60 on BSE after the company said it will acquire US-based Cooper Tire & Rubber Company in an all-cash transaction of around Rs 14,500 crore ($2.5 billion).
