A sharp selloff and trading halt in stock markets in mainland China rattled global stocks and Indian equity markets were no exception. The barometer index, the S&P BSE Sensex, slumped 537.55 points or 2.05% to settle at 25,623.35. The 50-unit Nifty 50 index lost 171.90 points or 2.16% to settle at 7,791.30. The Sensex fell below the psychological 26,000 mark. The Sensex and the Nifty, both, hit their lowest closing level in almost two weeks. Banking and telecom sector stocks along with index heavyweights HDFC, L&T, Infosys and Reliance Industries led the decline for the two key benchmark indices which snapped a two-day winning streak. All the nineteen sectoral indices on BSE moved lower.
In overseas stock markets, trading in mainland China was halted for the rest of the day after the CSI 300 Index plunged more than 7% at about 1:34 PM local time. As per the new norms which only came into force today, 4 January 2016, a move of 5% in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7% close the market for the rest of the day. Weak manufacturing data and a rapidly weakening Chinese yuan was the trigger for a sharp slide in Chinese stocks. European stocks edged lower as a steep drop in China's equity market rattled global equities. Trading in US stock index futures pointed to a sharp slide in US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 242 points at the opening bell.
The Sensex slumped 537.55 points or 2.05% to settle at 25,623.35, its lowest closing level since 22 December 2015. The Sensex lost 564.33 points or 2.15% at the day's low of 25,596.57. The index declined 44.38 points or 0.16% at the day's high of 26,116.52.
The Nifty lost 171.90 points or 2.16% to settle at 7,791.30, its lowest closing level since 22 December 2015. The index lost 182.10 points or 2.28% at the day's low of 7,781.10. The index fell 25.65 points or 0.32% at the day's high of 7,937.55.
All the nineteen sectoral indices on BSE were in the red. The BSE Telecom index (down 3.2%), the BSE Bankex index (down 2.59%), BSE Finance index (down 2.5%), BSE Industrials (down 2.42%), and the BSE Auto index (down 2.12%) underperformed the Sensex. The BSE Healthcare index (down 1.79%), the S&P BSE Energy index (down 1.54%), BSE Oil & Gas index (down 1.46%), the BSE IT index (down 1.37%), the S&P BSE Basic Materials index (down 1.26%), BSE Metal index (down 1.25%), BSE FMCG index (down 0.59%), BSE Utilities index (down 0.6%), and BSE Power index (down 0.51%) outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,599 shares declined and 1,289 shares rose. A total of 100 shares were unchanged.
The BSE Mid-Cap index dropped 1.2%. The BSE Small-Cap index shed 1.11%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3349 crore, higher than turnover of Rs 2984.79 crore registered during the previous trading session.
Index heavyweight Reliance Industries (RIL) fell 2.2% at Rs 993.05. The stock hit a high of Rs 1,014.20 and a low of Rs 987.30 in intraday trade.
Another index heavyweight and housing finance major HDFC fell 3.3% at Rs 1,215.80. The stock hit a high of Rs 1,253.80 and a low of Rs 1,212.50 in intraday trade.
Capital goods stocks dropped. BEML (down 1.79%), Bharat Heavy Electricals (Bhel) (down 3.45%), Havells India (down 3.96%), Thermax (down 0.44%), Crompton Greaves (down 2.22%) and Siemens (down 1.04%) declined.
Index heavyweight L&T lost 2.58% at Rs 1,255.35. The stock hit a high of Rs 1,291.25 and a low of Rs 1,252.50 in intraday trade.
Realty stocks declined. Oberoi Realty (down 4.66%), DLF (down 2.68%), Indiabulls Real Estate (down 2.21%), Housing Development & Infrastructure (down 2.62%), Prestige Estates Projects (down 2.63%), Unitech (down 2.2%), Sobha (down 0.11%), and Godrej Properties (down 0.83%) edged lower.
Telecom stocks tumbled. Bharti Airtel (down 4.1%), Tata Teleservices (Maharashtra) (down 3.07%) and Idea Cellular (down 5.01%) declined.
Reliance Communications (RCom) shed 6.52% to Rs 84.65 on profit booking after the stock jumped 12.69% in the preceding twelve trading sessions to Rs 90.55 on 1 January 2016, from a recent low of Rs 80.35 on 15 December 2015.
Bank stocks edged lower. Among public sector banks, Bank of Baroda (down 4.87%), Punjab National Bank (down 3.95%), State Bank of India (down 2.77%), Canara Bank (down 2.16%), Bank of India (down 1.79%), Corporation Bank (down 1.62%) and United Bank of India (down 0.68%) declined.
Among private sector banks, Yes Bank (down 3.73%), ICICI Bank (down 2.85%), IndusInd Bank (down 2.74%), Axis Bank (down 2.76%) and HDFC Bank (down 1.52%) edged lower.
Kotak Mahindra Bank (KMBL) fell 2.82% at Rs 704.05. The stock hit a high of Rs 725 and a low of Rs 704.05 in intraday trade. KMBL announced after market hours on Friday, 1 January 2016 that it has acquired 10 lakh shares at Rs 10 each aggregating to Rs 1 crore being 9.99% of the paid-up capital of Institutional Investor Advisory Services India. Institutional Investor Advisory Services India is a proxy advisory services provider offering advisory services, engagement services, voting recommendations and bespoke research. It registered a total income of Rs 2.66 crore in FY 2015.
Metal and mining stocks edged lower after weak China manufacturing data for December 2015. National Aluminium Company (down 3.84%), Hindustan Zinc (down 2.99%), Hindalco Industries (down 4.54%), Vedanta (down 2.89%), Jindal Steel & Power (down 1.7%), NMDC (down 1.43%) and Steel Authority of India (down 0.93%) declined. Tata Steel (up 0.91%) and JSW Steel (up 2.29%) edged higher. China is the world's largest consumer of steel, copper and aluminum.
Latest data showed that the Caixin China manufacturing purchasing managers' index (PMI), a private gauge of nationwide factory activity, declined to 48.2 in December 2015 from 48.6 in November 2015. A reading below 50 indicates contraction.
Meanwhile, the High Grade Copper for March 2016 delivery was currently down 2.69% at $2.0775 per pound on the COMEX.
Concerns about Chinese demand sent shares of Tata Motors tumbling. The stock was off 6.06% at Rs 377.30. China is a key market for Tata Motors' British luxury car unit Jaguar Land Rover (JLR). Meanwhile, Tata Motors after market hours on Friday, 1 January 2016, announced that the total sales of Tata Motor passenger and commercial vehicles declined 4% to 39,973 units in December 2015 over December 2014. Domestic sale of Tata commercial and passenger vehicles fell 6% to 35,416 units in December 2015 over December 2014. Exports rose 15% to 4,557 units in December 2015 over December 2014.
Meanwhile, Tata Motors during market hours today, 4 January 2016 announced that its Singapore subsidiary TML Holdings Pte has validly offered for sale S$318.75 million (of the S$350 million outstanding) in principal amount of the Notes pursuant to the tender, representing approximately 91.07% of the aggregate principal amount of the Notes outstanding. Further, holders of approximately 91.07% in aggregate principal amount of Notes have also completed voting instructions to have their votes cast at the meeting which will be held on 11 January 2016 for the extraordinary resolution relating to the Notes. It is expected that the quorum required for the meeting will be met and that the extraordinary resolution will be passed at the meeting, Tata Motors said. Once the extraordinary resolution is passed, TML Holdings Pte will have the right to exercise the call option, which will give it the option to redeem all of the balance outstanding Notes, Tata Motors said.
It may be recalled that Tata Motors' Singapore arm TML Holdings Pte had raised S$350 million, 4.25% senior notes due 2018 in May 2013 through issue of securities in Singapore.
Index heavyweight and IT major Infosys declined 2.04% at Rs 1,080.60. The stock hit a high of Rs 1,103.15 and a low of Rs 1,077.50 in intraday trade.
Wipro gained 0.28%. The company after market hours today, 4 January 2016, announced that it has appointed TK Kurien as the Executive Vice Chairman and Abidali Z Neemuchwala as the Chief Executive Officer and member of the board of the company. Both these appointments are effective 1 February 2016. Kurien will continue to report to Azim Premji and will remain a member of the board until 31 March 2017.
IRB Infrastructure Developers rose 5.25% at Rs 257.70 after the company said it has received an order worth Rs 10050 crore for a road project in Jammu and Kashmir. The company has received the letter of award from Ministry Of Road Transport And Highways (MORT&H), Government of India for construction, operation and maintenance of Zozila tunnel including approaches on National Highway (NH)-1 (Srinagar-Sonmarg-Gumri Road) in the state of Jammu and Kashmir on design, build, finance, operate and transfer (annuity) basis, IRB Infra said. The concession period for the project is 22 years, including a construction period of seven years. The total construction order book of the company now stands at Rs 16430 crore, IRB Infra said. The announcement was made on Sunday, 3 January 2016.
Meanwhile, the outcome of a monthly survey showed that incessant rainfall in Chennai in December 2015 impacted heavily on India's manufacturing sector in that month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) slipped to 49.1 in December 2015 from 50.3 in November 2015, pointing to deterioration in operating conditions across the manufacturing sector. The reading of 50 separates contraction from expansion.
Key indices snapped two-day winning streak today, 4 January 2016. The Sensex had gained 200.87 points or 0.77% in the preceding two trading sessions to settle at 26,160.90 on Friday, 1 January 2016, from a recent low of 25,960.03 on 30 December 2015. The Sensex has declined 494.19 points or 1.89% in first two sessions of this month. From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 789.81 points or 3.18%. The Sensex is off 4,401.39 points or 14.65% from a record high of 30,024.74 hit on 4 March 2015.
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