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Sensex slumps 340 points to end at lowest level since Sept 2012
Benchmark indices extended losses for fourth consecutive trading session amid weak global cues, along with metal, FMCG and IT shares leading the sharp decline.
The rupee also hit fresh all-time low, trading around 64.52 per dollar on rising expectations that the US Federal Reserve will soon start withdrawing its monetary stimulus to the US economy.
The 30-share Sensex ended down 340 points at 17,906 after hitting an intra-day low of 17,807 and the 50-share Nifty ended down 99 points at 5,303 after touching an intra-day low of 5,268. Nifty touched the lowest level since September 11, 2012.
The broader market ended lower with BSE Mid-cap index down 1.24% and the Small-cap index ending down 0.82%.
The market breadth ended dismal with 1,350 shares declining and 915 shares advancing.
MONEY MARKET
Government bonds were headed for their biggest gain in at least 15 years, while the rupee remained under pressure after the Reserve Bank of India said it will buy bonds to ease a cash crunch, and relaxed bond holding rules for lenders.
The rupee hits fresh all-time low of 64.52 per dollar as heavy dollar buying from large state-run banks along with demand from custodian banks hurt the local currency on Wednesday.
The partially convertible rupee was trading around 64.45 per dollar, after hitting a record low of 64.52.
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Sensex slumps 340 points to end at lowest level since Sept 2012
GLOBAL MARKETS
European shares hovered near three-week lows on Wednesday while the dollar found some support as investors braced for a U.S. Federal Reserve report which may shed light on when it will trim its stimulus policy.
Emerging market currencies remained under pressure from expectations that the minutes from the Fed's last policy meeting in July, due out later, will signal an early end to the supply of cheap dollars they have relied on
Asian shares found a sliver of support on Wednesday following some punishing falls, but the reprieve could prove vanishingly short should minutes of the Federal Reserve's July policy meeting add to suspicions it will soon pare back on stimulus.
FIIs
Foreign institutional investors sold Rs 14.2 billion of cash shares on Tuesday, exchange data showed, while domestic institutions were net buyers of Rs 10.66 billion of shares.
GOLD
Gold futures in India traded in the vicinity of their highest level in eight months on Wednesday due to a weaker rupee, while demand remained subdued ahead of the resumption of imports.
The actively traded gold for October delivery on the Multi Commodity Exchange (MCX) was 0.15% lower at Rs 30,765 per 10 gram. It touched a high of Rs 31,225 intraday, near an eight-month high hit on August 19.
CRUDE OIL
Brent crude oil fell below $110 a barrel on Wednesday on reports some Libyan oil exports might soon resume and on news the Seaway crude oil pipeline had shut, halting shipments from the U.S. Midwest to the Gulf Coast.
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Sensex slumps 340 points to end at lowest level since Sept 2012
SECTORS & STOCKS
BSE Metal and Oil & Gas indices dipped by almost 4% followed by counters like Realty, FMCG, Heathcare, Capital Goods, TECk, Power and Auto, all slumping between 2-3%. Apafrt from Banks and Consumer Durables, all the major BSE sectoral indices ended in red zone.
Metal shares like Sterlite Inds, Hindalco and Tata Steel dropped between 3-5%.
Hindustan Zinc declined 4%. The stock had jumped 13.1% yesterday on reports that the legal hurdle has been cleared for government's stake sale in the company and BALCO. Government of India holds 29.54% stake in Hindustan Zinc while Sterlite Industries (India) has 64.92% stake as of 30 June 2013.
Sterlite Industries (India) declined 4.81% after galloping 9.91% yesterday. Sesa Goa said that the merger of Sterlite Energy with Sesa Goa and the demerger of the aluminium business undertaking of Vedanta Aluminium (VAL) into Sesa Goa pursuant to the Scheme of Amalgamation and Arrangement have become effective.
Index heavyweight RIL declined by 4.72%. The petroleum ministry is 'examining' suggestions that Reliance Industries be asked to sell gas it has failed to deliver at the old price of $4.2 per million British thermal unit, the Lok Sabha was informed. ONGC dropped by over 2%.
Bharti Airtel was the top Sensex loser, down over 6%. MTN's growth suggests Bharti may find it tough to crack Nigeria, a critical market.
Shares of IT majors Infosys and TCS slumped between 1-2% on concerns about their valuations relative to the market and on fears that the rupee may regain some of its recent losses as it looks oversold at current levels.
The rupee made a record low of 64.13 to the dollar on Tuesday despite various measure by India's central bank and the government since mid-July.
"We remain positive on the IT sector. The growth recovery in US and Europe along with steep depreciation in rupee has improved outlook of IT companies. Today's correction is merely on account of profit-booking and can used to BUY IT stocks from a 6-8 month horizon," said Sanjeev Hota, assistant VP (IT), Sharekhan.
FMCG major ITC slipped by almost 3%.
Pharma major Ranbaxy dropped by nearly 13%, biggest percentage loss since Feb 2009.
Banking shares erased early gains. Bank shares were in focus, after the Reserve Bank of India (RBI) decided to allow banks to transfer SLR (statutory liquidity ratio) securities to HTM (Held to Maturity) category from available for sale (AFS) / held for trading (HFT) categories up to the limit of 24.5% as a one-time measure. HDFC and HDFC Bank gained between 2-3%.
SMART MOVERS
Punj Lloyd plunged 9% has decided to exclude the company from the futures & options (F&O) segment with effect from November 1, 2013.
Financial Technologies ended lower by 8%, extending its previous day’s 7% fall, after National Spot Exchange Limited (NSEL), a subsidiary of the company defaulted on payments to its investors.
Ruchi Soya Industries was locked in lower circuit of 10% at Rs 32.25, its lowest level since April 2009, on back of heavy volumes.