Recovery in banking stocks and index heavyweights ITC and Reliance Industries (RIL) aided recovery for key benchmark indices in afternoon trade. The barometer index, the S&P BSE Sensex, was currently off 310.14 points or 1.12% at 27,297.68. The broad market depicted weakness. There were almost three losers against every gainer on BSE. The BSE Mid-Cap index was off 1.03%. The BSE Small-Cap index was off 1.15%. The decline in this index was higher than Sensex's decline in percentage terms. Eleven out of twelve sectoral indices on BSE were in the red. In overseas markets, Asian stocks tumbled as weak Chinese manufacturing data added to growing concerns over China's economic slowdown.
Realty stocks declined. Shares of power generation and power distribution companies also edged lower.
Earlier, the Sensex hit its lowest level in more than nine weeks and the 50-unit CNX Nifty hit 7-1/2-week low in early trade.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1007.26 crore yesterday, 20 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 567.87 crore yesterday, 20 August 2015, as per provisional data.
In overseas markets, European stocks edged lower in early trade as weak Chinese manufacturing data triggered sell-off in Asian stocks. Chinese stocks led losses for Asian markets after a flash purchasing managers' index showed Chinese manufacturing activity shrank for a sixth straight month in August. US stocks suffered their worst selloff in 2015 yesterday, 20 August 2015, as markets were buffeted by worries about a slowdown in global growth.
At 13:18 IST, the S&P BSE Sensex was down 310.14 points or 1.12% at 27,297.68. The index fell 476.38 points at the day's low of 27,131.44 in early trade, its lowest level since 18 June 2015. The index fell 165 points at the day's high of 27,442.82 in early trade.
The CNX Nifty was down 98.60 points or 1.18% at 8,274.15. The index hit a low of 8,225.05 in intraday trade, its lowest level since 29 June 2015. The index hit a high of 8,305.40 in intraday trade.
The BSE Mid-Cap index was down 116.26 points or 1.03% at 11,201.62. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was down 134.19 points or 1.15% at 11,546.62. The decline in this index was higher than Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak. There were almost three losers against every gainer on BSE. 1,913 shares declined and 646 shares rose. A total of 95 shares were unchanged.
Realty stocks declined. Sobha (down 2.33%), Unitech (down 1.6%), Oberoi Realty (down 5.99%), Godrej Properties (down 5.94%), Phoenix Mills (down 1.08%), DLF (down 4.16%), and Omaxe (down 0.56%) edged lower.
Shares of power generation and power distribution companies edged lower. Torrent Power (down 1.66%), NTPC (down 1.56%), Adani Power (down 1.35%), Power Grid Corporation of India (down 1.29%), and Reliance Infrastructure (down 1.28%) declined. Tata Power Company rose 0.74%.
NHPC shed 1.39%. NHPC after market hours yesterday, 20 August 2015, announced that the operations of Unit number 4 of its Chutak power station were restored on 19 August 2015. Earlier, the company had on 29 June 2015 announced said that the Chutak power station was under complete shutdown consequent upon sudden increase in water level.
Shares of BPCL edged lower on reports that a foreign brokerage has maintained underperform rating on the stock. The stock declined 1.76%.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower after weak Chinese manufacturing data. Brent for October settlement was currently off 17 cents at $46.45 a barrel. The contract had declined 54 cents or 1.14% to settle at $46.62 a barrel during the previous trading session.
India imports about 80% of its crude requirements and a decline in crude prices eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. State-run oil marketing companies have been cutting petrol and diesel prices on the back of falling international prices. Lower diesel prices will reduce transportation costs which in turn will reduce fuel price inflation. Diesel is a key transportation fuel.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 65.805, compared with close of 65.55 during the previous trading session.
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, 20 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 20 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 10% below the LPA in Central India, 7% below the LPA in East & Northeast India and 1% below the LPA in Northwest India until 20 August 2015.
Separately, the IMD in its weekly report said that as per its extended range forecast till 8 September 2015, above normal rainfall activity is likely over northeast and adjoining east India on many days till beginning of September. Normal rainfall activity likely over south peninsula during the period from 20 to 24 August and 4 to 8 September 2015, the IMD said. Below normal rainfall activity is likely over plains of northwest and central India, the IMD said.
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.
In overseas markets, European stocks edged lower in early trade today, 21 August 2015, as weak Chinese manufacturing data triggered sell-off in Asian stocks. Key indices in France, Germany and UK were off 0.81% to 1.48%.
Greece's Prime Minister Alexis Tsipras has reportedly announced that he is resigning and has called an early election. Tsipras, who was only elected in January, said he had a moral duty to go to the polls now that a third bailout had been secured with European creditors.
Markit Economics said today, 21 August 2015, that the latest flash France PMI data signalled that private sector output continued to rise in August. However, the rate of growth was modest and the slowest in four months. This was indicated by the seasonally adjusted Markit Flash France Composite Output Index, which was at 51.3, down slightly from 51.5 in July.
German consumer sentiment is set to weaken in September despite improved clarity about Greece's future, market research group GfK said in its monthly survey released today, 21 August 2015. The forward-looking GfK consumer sentiment index is expected to weaken to 9.9 points in September from 10.1 points in August.
Chinese stocks led losses for Asian markets today, 21 August 2015, after a flash purchasing managers' index showed Chinese manufacturing activity shrank for a sixth straight month in August. In mainland China, the Shanghai Composite was off 4.27%. In Hong Kong, the Hang Seng was off 1.56%.
The Caixin/Markit flash purchasing managers' index today, 21 August 2015, showed Chinese manufacturing activity shrank for a sixth straight month in August, falling to 47.1 from July's final reading of 47.8 and remaining below the threshold of 50 that separates expansion from contraction. August's reading was the lowest since March 2009.
In other Asian markets, key indices in Japan, Taiwan, South Korea, Singapore and Indonesia were off 1.54% to 3.02%.
US stocks suffered their worst selloff in 2015 yesterday, 20 August 2015, as markets were buffeted by worries about a slowdown in global growth. The number of Americans filing new applications for unemployment benefits unexpectedly rose last week. Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 277,000 for the week ended 15 August 2015, the Labor Department said yesterday, 20 August 2015.
US existing home sales climbed in July to their prerecession pace. Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said yesterday, 20 August 2015.
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