After a massive intraday slide triggered by Britain voting to leave the European Union in a hotly fought referendum, the two key benchmark indices trimmed losses in afternoon trade. At 13:15 IST, the barometer index, the S&P BSE Sensex, was down 833.79 points or 3.09% at 26,168.43. The Nifty 50 index was down 257.85 points or 3.12% at 8,012.60. The Nifty was currently trading above the psychologically important 8,000 mark after falling below that level in morning trade. The Sensex was currently trading above the psychologically important 26,000 level. The barometer index alternately moved above the below that mark. Earlier, the Sensex first fell below the psychologically important 27,000 and then below the next psychologically important 26,000 level.
The recovery for the two key indices after a deep slide materialized as global stocks trimmed losses after a massive slide triggered by the outcome of a British referendum showing UK had voted to leave the European Union.
The Sensex fell 1,090.89 points, or 4.04% at the day's low of 25,911.33 in afternoon trade, its lowest level since 25 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 343.40 points, or 4.15% at the day's low of 7,927.05 in afternoon 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 more than six losers against every gainer on BSE. 2,029 shares fell and 303 shares rose. A total of 118 shares were unchanged. The BSE Mid-Cap index was currently down 2.32%. The BSE Small-Cap index was currently down 2.91%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
In overseas stock markets, European stocks plummeted in early trade as the UK voted to leave the European Union in a historic referendum dubbed "Brexit". The FTSE 100 index was currently down 6.04%. In Germany, the DAX index was currently down 7.35%. In France, the CAC 40 index was currently off 8.93%. Investors fear that Britain's exit from the EU could destabilize the trade bloc. Britain has been a member of the trading bloc since 1973.
UK's Prime Minister David Cameron said he will resign, after Britain voted to leave the European Union in a hotly fought referendum. During a speech after the Brexit results were announced, the prime minister said the break-up negotiations with Europe need to take place under a new leader. The new prime minister will take over in October, he said.
UK's central bank Bank of England (BoE) said in a statement that it is monitoring developments closely. The BoE said it has undertaken extensive contingency planning and is working closely with the UK Treasury, other domestic authorities and overseas central banks. The BoE said it will take all necessary steps to meet its responsibilities for monetary and financial stability.
Trading in US index futures indicated a sharp setback for US stocks at the opening bell after Britain voted to leave the European Union in a historic referendum. Trading in index futures indicated that the Dow Jones Industrial Average could slump 477 points at the opening bell today, 24 June 2016.
Asian shares tumbled as results from the UK's referendum on its European Union membership showed the country had voted to leave the trading bloc. In Japan, the Nikkei 225 Average settled 7.92% lower. 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.
Closer home, Finance Minister Arun Jaitley said in a statement that the 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 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 goods and services tax(GST)that will help India realize its medium term growth potential of 8-9%.
Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said in a phone interview to a television channel that he did not expect significant selling from foreign investors in India due to Britain's vote to leave the European Union because of India's better economic fundamentals and upcoming government reforms. In a statement posted on the RBI's website, Rajan said that the Indian economy has good fundamentals, low short term external debt and sizeable foreign exchange reserves. These should stand the country in good stead in the days to come. The RBI Governor said that the central bank is continuously maintaining a close vigil on the market developments, both domestically and internationally, and will take all necessary steps, including liquidity support (both dollar and INR), to ensure orderly conditions in financial markets.
Index heavyweight and housing finance major HDFC fell 2.28%. The company announced that it has filed term sheet for issuing secured redeemable non-convertible debentures worth Rs 1035 crore on private placement basis. The coupon rate on debentures is 8.5% per annum. The tenor of the debentures is three years with redemption date being 28 June 2019. The issue opens on 28 June 2016 and closes on the same day. The object of the issue is to augment long term resources of the company, HDFC said. The proceeds of the present issue would be utilized for financing/refinancing the housing finance business requirements of the company.
Bank stocks dropped across the board. Among private bank stocks, HDFC Bank (down 3.05%), Kotak Mahindra Bank (down 3.23%), ICICI Bank (down 6.06%), Axis Bank (down 5.15%), IndusInd Bank (down 3.5%) and Yes Bank (down 5.06%) declined.
Among PSU bank stocks, State Bank of India (SBI) (down 5.08%), Punjab National Bank (down 2.77%), Bank of Baroda (down 6.28%), Canara Bank (down 4.18%), Syndicate Bank (down 6.41%), UCO Bank (down 5.23%), IDBI Bank (down 7.89%), Bank of India (down 5.34%) and Union Bank of India (down 6.38%) dropped.
Cement stocks declined. Ambuja Cements (down 2.71%), Shree Cement (down 2.61%), ACC (down 2.58%), UltraTech Cement (down 2.18%) fell.
Grasim Industries was up 0.35% at Rs 4,311.75. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Goa Carbon lost 4.96% after the company said it has temporarily stopped operations at its Bilaspur plant in Chattisgarh from 22 June 2016, due to maintenance work. Goa Carbon said that there would not be any financial impact due to the temporary shutdown of the company's Bilaspur unit as there is sufficient inventory to service the orders in hand. The announcement was made after market hours yesterday, 23 June 2016.
Omax Autos rose 0.64% after the company said that its railway division has secured an order estimated between Rs 90-100 crore for supply of railway parts from Indian Railways. Omax Autos said that the formal purchase order would be received by the company in due course of time. The announcement was made after market hours yesterday, 23 June 2016.
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