In a
harrowing day of trade Indian markets suffered brutal sell-off, it was only the
last hour recovery that helped the markets cap their losses otherwise Wednesday
could have proved one of the worst trading day for the markets, after Sensex
slumped nearly 650 points to slip below the psychological 24,000 mark for the
first time since May 16, 2014. Bulls that were in action in last session were
not even in picture today, with bears taking the command from the very
beginning and the last session gains proved just a dead cat bounce, with
markets resuming their declining streak after a day of break. The sell-off came
after IMF painted a gloomy picture of the global economy and sharp slowdown in
China. Though, IMF retained India's growth forecast at 7.5 per cent for 2016
and 2017 but lowered China's forecast to 6.3 per cent in 2016 and further down
to 6 per cent in 2017 and revised down the global growth projection by 0.2
percentage point to 3.4 per cent for 2016.On the domestic front too, sustained
capital outflows amid sluggish corporate earnings and domestic demand with weak
trend on Asian bourses on renewed worries over global slowing economic growth
and falling oil prices kept weighing the sentiments through the day. The delay
in economic reforms and high volatility in global markets have led foreign
investors to turn net sellers of domestic equities. The rupee weakness too
contributed to the fall, rupee breached 68 per dollar mark for the first time
since September 4, 2013 on continued foreign fund outflow. On the global front,
while the US markets consolidated and ended mixed, the Asian markets resumed
the slump, initiating global sell-off once again after crude oil dipped below
$28 a barrel, later the European markets joining the sell-off too made a weak
start. Back home, there was panic selling in the markets on concerns over the
anemic global economic growth. Sensex that fell below 24,000-mark by noon after
the feeble start of the European markets, made good recovery in last half hour
of trade, recovering more than 200 points from its day's low to protect the
24000 bastion. Some good earnings along with value based buying at lower levels
supported the markets in last, however sustained selling pressure in
heavyweights after a feeble start of the European markets, weighed on the
sentiments and restricted any major recovery. The sell-off was brutal and broad
based, with across the sectors selling pressure, with realty, metal, energy and
banks suffering severe beating. Finally, the
BSE Sensex slumped by 417.80 points or 1.71% to 24,062.04, while the CNX Nifty
lost 125.80 points or 1.69% to 7,309.30.
The US markets closed lower on
Wednesday, despite trimming heavier losses scored earlier in the session as a
modest bounce off session lows by crude-oil prices provided some relief. The
stock-market rout came as equities racked up sharp losses world-wide, fueled by
oil falling below $27 a barrel and worries over an economic slowdown in China and
other developing markets. On the economy front, consumer prices fell again in
December owing mostly to falling costs of food and gasoline. The consumer price
index declined by seasonally adjusted 0.1% last month. For all of 2015
inflation rose just 0.7%, the second slowest rate in 50 years. The low rate was
largely the result of the biggest drop in gasoline prices in more than a
decade. The cost of food also tapered off toward the end of the year because of
falling prices for agricultural goods. In December, energy prices dropped 2.4%
and food costs retreated 0.2%. The Dow Jones Industrial Average lost 249.28
points or 1.56 percent to 15,766.74, the Nasdaq was down 5.26 points or 0.12
percent to 4,471.69 while the S&P 500 dropped 22.00 points or 1.17 percent
to 1,859.33.
Crude oil futures continuing
their slump fell to fresh 12-year lows on Wednesday despite paring some of
their losses. Investors continued to digest bearish comments from the
International Energy Agency (IEA) a day earlier when it warned that oil prices
worldwide "could drown in oversupply" if current conditions persist. Crude
prices have been in free fall since last summer, when crude oil was hovering
above $60.Benchmark crude oil futures for March delivery shed $1.22 or 4.08 percent
to close at $28.37 a barrel after trading in a range of $27.57 and $29.75 a
barrel on the New York Mercantile Exchange. In London, Brent oil futures for March
delivery declined by $0.83 or 2.86 percent to $27.93 a barrel on the ICE.
Indian
rupee ended weaker against dollar on Wednesday, due to demand for the greenback
from banks and importers. Weakness in the rupee is being attributed to the
relentless selling in stock market. Moreover, sustained capital outflows
weighed on the domestic unit. After getting a weak opening, rupee breached
68-mark for the first time since September 4, 2013, but pulled back as
state-owned banks were spotted selling dollars likely on behalf of the Reserve
Bank of India. On the global front, the safe-haven yen soared on Wednesday, as
risk appetite soured after crude oil prices fell to near 13-year lows, dragging
the dollar to a one-year low with investors trimming the chances of more
tightening by the Federal Reserve. Finally, the rupee ended at 67.96, 31 paise
weaker from its previous close of 67.65 on Tuesday.
The
FIIs as per Wednesday's data were net sellers in equity and in debt segments
both. In equity segment, the gross buying was of Rs 2688.35 crore against gross
selling of Rs 3449.78 crore, while in the debt segment, the gross purchase was
of Rs 605.79 crore with gross sales of Rs 801.84 crore.
The US markets ended lower though
the major averages clawed back major portion of early losses as buyers looked
for bargains late in the session after the Labor Department reported that its
consumer price index for December eased 0.1 percent month-over-month. The Asian
markets have made mostly a positive start, with some indices rebounding sharply
on speculation the selloff that took global equities to the brink of a bear
market may have gone too far. The Indian markets despite some late hour
recovery went through brutal sell-off in last session and major benchmarks lost
over one and half a percent for the day, barely managing to hold their crucial
support levels on continued Chinese worries. Today, the start is likely to be
in green and good bounce back can be seen despite mixed global cues. Traders
will be taking some comfort with Reserve Bank of India Governor Raghuram
Rajan's statement that India is affected by the 'same kind of jitters'
impacting other world markets, but things will stabilize and people will look
at stable emerging markets, including India.
Also, a private report has said that India's current account deficit may
narrow to 0.5 percent of GDP in 2016 from 0.7 percent in 2015 owing to lower
commodity prices, particularly oil. The report noted that export volumes are
likely to remain sluggish on account of weak global demand, while import
volumes would rise mainly due to strong domestic demand and real effective
exchange rate appreciation. Power sector may see some bounce back, reacting to
government's new power tariff policy which allows 100 percent expansion by
existing power plants, passing on levies to consumers and purchase of 100
percent electricity produced from waste. Testile stocks too may see some
action, as the government has said that it has initiated the process of
settlement of Rs 3,000 crore dues related to some 'blackout and left-out' cases
which found no mention in the Amended Technology Upgradation Fund Scheme
(ATUFS).
Support
and Resistance: NSE Nifty and BSE Sensex
Index
|
Previous close
|
Support
|
Resistance
|
CNX Nifty
|
7309.30
|
7210.23
|
7439.63
|
BSE Sensex
|
24062.04
|
23825.94
|
24311.95
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
SBI
|
286.56
|
173.65
|
169.88
|
179.03
|
Vedanta
|
255.96
|
63.90
|
62.25
|
66.45
|
Axis Bank
|
156.06
|
387.60
|
377.03
|
395.78
|
ICICI Bank
|
130.49
|
224.40
|
220.37
|
228.17
|
Reliance Industries
|
103.12
|
1004.55
|
984.73
|
1029.63
|
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Reliance Industries has reported 41.95% rise in its net profit at Rs 7218.00 crore for quarter ended December 31, 2015 as compared to Rs 5085.00 crore for same quarter in previous year.
SBI is planning to open 3 new branches at Kaparada, Kommadi, Chinamushidivada in Vizag & another at Balaga in Srikakulam district in Andhra Pradesh by end of March 2016.
Coal India will be initially spending Rs 200 crore on technical up-gradation in various areas including electronic fencing of mines on the lines of practices in advanced nations like US and Australia.
Diversified group ITC's instant noodles brand Yippee is inching closer to become a Rs 1,000- crore brand, making the most out of the controversy that hit rival Nestle's Maggi.