Key benchmark indices hit fresh intraday low in afternoon trade. At 13:22 IST, the barometer index, the S&P BSE Sensex lost 299.67 points or 0.93% at 32,070.37. The Nifty 50 index fell 111.50 points or 1.10% at 10,010.40. Market sentiment took a hit after North Korea's threat that it could consider testing a nuclear weapon in the Pacific.
North Korea's foreign minister reportedly warned yesterday, 21 September 2017 that Pyongyang could test a hydrogen bomb over the Pacific Ocean in response to US President Donald Trump's threats of military action.
The Sensex tumbled 346.67 points or 1.07% at the day's low of 32,023.37 in afternoon trade, its lowest level since 12 September 2017. It fell 27.23 points or 0.08% at the day's high of 32,342.81 in early trade. The Nifty lost 129.75 points or 1.28% at the day's low of 9,992.15 in afternoon trade, its lowest level since 11 September 2017. It fell 26.85 points or 0.26% at the day's high of 10,095.05 in early trade.
Among other indices, the S&P BSE Mid-Cap index fell 1.57%. The S&P BSE Small-Cap index lost 1.59%. The losses in both the indices were higher than the Sensex's slide in percentage terms.
Broad market depicted weakness. There were more than three losers for every gainer on BSE. 1,879 shares declined and 564 shares advanced. A total of 132 shares were unchanged.
Metal shares tumbled after China's rating downgrade. Jindal Steel & Power (down 5.54%), National Aluminium Company (down 4.69%), Steel Authority of India (down 3.85%), Hindalco Industries (down 3.67%), Vedanta (down 3.04%), NMDC (down 2.88%), Hindustan Zinc (down 2.52%), Tata Steel (down 2.42%), Hindustan Copper (down 1.93%), Bhushan Steel (down 1.45%) and JSW Steel (down 1.14%), edged lower. China's is the world's largest consumer of industrial metals.
S&P Global Ratings cut China's sovereign credit rating for the first time since 1999, citing the risks from soaring debt, and revised its outlook to stable from negative. The sovereign rating was cut by one step, to A+ from AA-, the company said in a statement late yesterday, 21 September 2017. In the event that China were to default on its external debt, S&P said that three foreign banks operating there would be "unlikely to withstand a stressed scenario."
The downgrade, the second by a major ratings company this year, represents ebbing international confidence that China can strike a balance between maintaining economic growth and cleaning up its financial sector.
Moody's cut its rating on China to A1 from Aa3 in May this year, citing similar concerns over economy-wide debt and effects on state finances. Moody's cited the likelihood of a material rise in debt and the burden that will place on the state's finances, while also changing the outlook to stable from negative.
Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for December 2017 delivery was currently down 0.72% at $2.9135 per pound on the COMEX.
Most pharmaceutical shares declined. IPCA Laboratories (down 4.14%), Wockhardt (down 2.77%), Piramal Enterprises (down 2.44%), Strides Shasun (down 1.69%), Aurobindo Pharma (down 1.39%), Divi's Laboratories (down 1.34%), Cadila Healthcare (down 0.38%), GlaxoSmithKline Pharmaceuticals (down 0.32%), Lupin (down 0.24%) and Dr Reddy's Laboratories (down 0.02%), edged lower. Alkem Laboratories (up 0.08%), Cipla (up 0.83%), Sun Pharmaceutical Industries (up 0.87%) and Glenmark Pharmaceuticals (up 1.46%), edged higher.
Punjab National Bank was down 1.55% to Rs 139.75. The bank said that its board will meet on 27 September 2017 for considering raising common equity tier capital upto Rs 5000 crore as per Basel III requirements. The announcement was made during trading hours today, 22 September 2017.
Shares of Reliance Home Finance were locked in 5% upper circuit at Rs 109.20, following the demerger of home finance business of Reliance Capital. Reliance Home Finance listed on the stock exchanges today, 22 September 2017. Reliance Home Finance was demerged from Reliance Capital. Reliance Capital shareholders have already received one share of Reliance Home Finance for every share held in Reliance Capital as on 6 September 2017.
Reliance Home Finance has assets under management, including securitised portfolio, of Rs 13022 crore as of 30 June 2017, as per reports. Reliance Capital holds 51% stake in Reliance Home Finance. The firm offers home loan solutions like loan against property, construction finance and affordable housing loans.
The India Meteorological Department (IMD) in its weekly weather report said that for the country as a whole, cumulative rainfall during this year's monsoon upto 20 September has been 5% below the normal rainfall. 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.
Overseas, most European shares were trading lower in early trade on fresh tension on the North Korean front, while L'Oreal rallied in Paris on talk about possible ownership changes at the cosmetics giant.
European Central Bank (ECB) President Mario Draghi said yesterday, 21 September 2017 that monetary policy is not the right instrument to address financial imbalances in the euro zone and macroprudential tools must be used to tackle local issues.
Asian stocks edged lower after North Korea's threat that it could consider testing a nuclear weapon in the Pacific. US stocks declined yesterday, 21 September 2017 as profit booking emerged after recent winning streak.
In the economic news, the US initial claims for state unemployment benefits declined 23,000 to a seasonally adjusted 259,000 for the week ended 16 September, the Labor Department said yesterday, 21 September 2017.
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