Sensex hits almost six-month low

Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. At 14:18 IST, the barometer index, the S&P BSE Sensex was down 398.76 points or 1.52% at 25,752.94. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently down 142.35 points or 1.76% at 7,931.75. The Sensex was currently hovering below the psychological 26,000 mark after falling below that mark in morning trade. The Nifty was currently trading below the psychological 8,000 level after sliding below that mark in mid-morning trade. The Nifty hit almost five-month low in mid-afternoon trade. The Sensex hit almost six-month low.

 

The market remained in the negative zone so far during the trade after slipping into the red in early trade after opening in the positive terrain. The Sensex lost 417.28 points or 1.59% at the day's low of 25,732.96 in mid-afternoon trade, its lowest level since 25 May 2016. The barometer index rose 120.04 points or 0.45% at the day's high of 26,270.28 at the onset of the trading session. The Nifty lost 146.10 points or 1.8% at the day's low of 7,928 in mid-afternoon trade, its lowest level since 24 June 2016. The index rose 28.35 points or 0.35% at the day's high of 8,102.45 at the onset of the trading session.

The recent selling by the foreign portfolio investors (FPIs) of Indian stocks weighed on sentiment. FPIs sold shares worth a net Rs 926.32 crore on Friday, 18 November 2016, as per provisional data released by the stock exchanges. FPIs were net sellers for the seventh straight session. Likely short term negative impact on the economy of recent demonetization of higher denomination notes by the Indian government and worries that the recently elected US president Donald Trump's policies stance - from protectionism and fiscal expansion - will boost inflation and lead the Federal Reserve to raise interest rates more than expected continued to weigh on sentiment. Investors fear that the higher interest rates in the US will spark capital outflows from the emerging equity markets.

In overseas stock markets, European stocks gained in early trade. Asian stocks witnessed a mixed trend. US stock market finished lower on Friday, 18 November 2016, but higher for the week as Wall Street heads into a holiday-shortened week when the focus will be on a slew of economic data and fresh scrutiny of a suddenly surging US dollar and rising interest rates. A recent rally sparked by bullishness about President-elect Donald Trump's potential pro-growth fiscal policies helped pushed stocks back toward record levels. Friday's trading was subdued as investors pulled back and focused on remarks made on the previous day by Federal Reserve Chairwoman Janet Yellen that pointed to a hike in interest rates next month.

Closer home, the broad market depicted weakness. There were more than six losers against every gainer on BSE. 2,161 shares fell and 348 shares rose. A total of 146 shares were unchanged. The BSE Mid-Cap index was currently down 2.65%. The BSE Small-Cap index was currently down 2.95%. The decline in both these indices was higher than the Sensex's decline in percentage terms.

FMCG stocks declined. Tata Global Beverages (down 2.87%), Britannia Industries (down 0.35%), Procter & Gamble Hygiene and Health Care (down 1.23%), Hindustan Unilever (HUL) (down 0.12%), Dabur India (down 0.41%), Nestle India (down 0.1%), Jyothy Laboratories (down 3.52%), Bajaj Corp (down 1.55%), Colgate Palmolive India (down 2.09%), and Godrej Consumer Products (down 0.72%) declined. Marico (up 0.7%) and GlaxoSmithkline Consumer Healthcare (up 0.65%) gained.

Metal and mining stocks fell across the board. Bhushan Steel (down 0.76%), Jindal Steel & Power (down 3.41%), Tata Steel (down 3.73%), NMDC (down 2.94%), Hindalco Industries (down 3.17%), Steel Authority of India (down 2.94%), JSW Steel (down 2.78%), Hindustan Zinc (down 1.82%) and National Aluminium Company (down 1.79%) edged lower.

Vedanta shed 3.48%. The company announced that its subsidiary Sesa Mining Corporation has revoked the suspension order in the Bicholim mines with immediate effect. The management took the decision after employees appealed to resume work. Sesa Mining Corporation had recently suspended the work at Bicholim mines due to union agitation/activism. The announcement was made after market hours on Friday, 18 November 2016.

Mahindra & Mahindra (M&M) dropped 3.3%. The company announced that it inaugurated a state of the art spare parts warehouse in Mahindra World City (MWC), Jaipur. The announcement was made during market hours today, 21 November 2016. The warehouse will cater the requirement of company's customers in north and north western region of the country for both automotive and tractor spare parts. Spread over an 11 acre plot with an additional 5 acres for future expansion, this state-of-the-art spare parts warehouse aims to significantly reduce the order processing time for its customers based in North India. The processing time for the availability of spare parts and distance-to-market is expected to take less than 4 days. The company will procure spare parts from over 1,000 vendors and 9 plants for this new facility. With an investment of Rs. 150 crore, it will generate employment for over 450 direct and indirect employees.

This is the Mahindra's fourth spare parts warehousing facility, with the others being in Kanhe for automotive parts, Bhiwandi for tractor parts & Hyderabad for commercial vehicle parts, which send out supplies directly to dealerships and in the open market. The world class warehouse in MWC, Jaipur has state-of-the-art infrastructure including a 4 storied warehouse for stock storage, a store capacity for Rs 130 crore of inventory and extreme flexibility in the storage system.

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