Key benchmark indices tumbled for second consecutive day on Tuesday, following a surge in global crude oil prices after attacks on Saudi Arabia's oil facilities. Selling was seen across all sectors.
The barometer index, the S&P BSE Sensex, fell 642.22 points or 1.73% to 36,481.09, as per the provisional closing data. The Nifty 50 index fell 176.6 points or 1.6% to 10,826.90, as per the provisional closing data.
After opening at 11,000 mark, the 50-unit Nifty quickly descended in the morning trade. The index continued its downtrend and breached 10,900 mark in the afternoon trade. The Nifty managed to stabilize at 10,800 level and closed above that level. NSE India VIX jumped 6.97% to 15.995.
The market breadth was weak. On the BSE, 856 shares rose and 1668 shares fell. A total of 148 shares remain unchanged. The S&P BSE Small-Cap index fell 1.84%. The S&P BSE Mid-Cap index fell 1.77%.
Among index pivotals, Reliance Industries (down 1.18%), TCS (down 1.36%) and HDFC Bank (down 1.57%) dragged index lower.
GAIL (up 1.73%), Titan Company (up 0.94%) and Hindustan Unilever (up 0.81%) advanced.
Hero MotoCorp (down 6.23%), Tata Motors (down 5.37%), Axis Bank (down 4.55%) and Tata Steel (down 4.56%) tumbled.
Shares of State Trading Corporation were locked in a lower circuit of 20% at Rs 106.9 while MMTC tumbled 16.77% after media reports suggested that the government is looking to shut operations. The government is also planning to shut operations of unlisted Project and Equipment Corporation of India (PEC).
Trade minister Piyush Goyal on Tuesday was quoted by the media as saying that the government will shut down state-owned trading companies such as State Trading Corporation (STC), Project and Equipment Corporation (PEC) and MMTC one by one as "the government has no business of remaining in such businesses". Slowly the original purpose of these public sector units have come to an end. It's not the business of the government to remain in such businesses. The government should not run companies only for gold imports. We have started the discussion and will close them down one by one. The companies have not covered themselves with glory, Goyal reportedly told the media.
Tata Communications closed at Rs 273. The board of directors of Tata Communications fixed Wednesday, 18 September 2019 as the record date for determining the shareholders who shall be eligible to receive the equity shares of Hemisphere Properties India (HPIL). Tata Communications on 7 August said its scheme of arrangement for demerger of surplus land from the company to HPIL had received approval from the Ministry of Corporate Affairs (MCA). As per the demerger plan, the company would transfer the surplus land to HPIL after consequent issue of equity shares by HPIL to the shareholders of the company. HPIL shall issue and allot one equity share to each member of Tata Communications.
Kaveri Seed Company rose 1%. The company said that a meeting of the board of directors of the company is scheduled on 24 September 2019, to consider and approve the proposal of buyback of equity shares of the company. The announcement was made after market hours yesterday, 16 September 2019.
Lemon Tree Hotels declined 4.1%. Lemon Tree Hotels signed a License Agreement for a 80 room Hotel, at the Sujalaam Skycity, Andal, Durgapur, West Bengal near the Kazi Nazrul Islam (KNI) airport, under the company's brand 'Lemon Tree Hotel'. The hotel is expected to be operational by January, 2023. The announcement was made after market hours yesterday, 16 September 2019.
Realty major DLF announced that it has sold over 9 acres of land located in Sector 74 A in Gurugram to American Express (India) for Rs 32 crore an acre. The proposed extension of the Gurugram metro route passes through SPR opposite the land acquired by American Express and so will be the planned Rapid Rail between Delhi & Alwar. DLF was down 4.18% at Rs 154.9.
Tata Power announced the execution of a 'share purchase agreement' with Exxaro Resources as it plans to sell its entire stake in South African joint venture Cennergi for $106 million. Cennergi is a 50:50 joint venture between Exxaro Resources and Khopoli Investments (100% subsidiary of Tata Power). Tata Power was trading 0.54% lower at Rs 64.
BEML announced a strategic partnership with Wipro Infrastructure Engineering aimed at collaborating on Aerospace, Industrial Automation, 3D Printing, Artificial Intelligence and Hydraulic System Engineering. BEML was trading 2.64% lower at Rs 813.
Telecom major Bharti Airtel fell 0.76% after a media report indicated that talks to sell stake in merged tower company has begun. The telecom operator has begun talks to sell stake in merged company of Bharti Infratel and Indus Towers. ATC and Brookfield are interested parties to acquire the stake in the merged entity, reports suggested.
Sun Pharmaceutical Industries fell 1.44%. The pharmaceutical major, according to media sources, has infringed six patents of Viberzi along with Zydus Cadila. According to a complaint filed in federal court on Friday, Allergan is seeking a court order to block all copies till the patent expires. The company also looks forward to collect cash compensation if the copies were made before.
Overseas, European markets were trading lower while most Asian markets closed on a mixed note as the flight from risk assets continued in the wake of devastating weekend attacks on Saudi Arabia's oil industry.
China's industrial production grew at the weakest pace in 17-1/2 years last month and fixed-asset investment in January-August increased at a slightly lower rate than expected, data showed.
US President Donald Trump on Monday reportedly said it looks like Iran was behind the attack, but suggested no military response was imminent. The Saudi government reportedly called the attack an unprecedented act of aggression and sabotage but stopped short of directly pinning blame on Iran. Meanwhile, Tehran reportedly denied responsibility for the strike, which knocked out about half of Saudi Arabia's oil production.
US stocks fell on Monday after weekend attacks on Saudi Arabia's oil facilities added to investors' concerns about geopolitical risk and a stumbling global economy.
Investors are looking forward to a meeting of the Federal Reserve's interest-rate setting committee beginning Tuesday and concluding Wednesday, after which Chairman Jerome Powell will announce the central bank's latest policy decision. Expectations are that the Fed will cut interest rates a second time this year.
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