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An evening walk down Dalal Street | Sea of red on D-Street! Sensex down over 500 points, Nifty gives up 11,300

September 11
18:06 2018

Bears painted the town red on Tuesday as a combination of weak rupee, high crude prices, trade war concerns, and a global selloff crashed the market. The Nifty managed to give up 11,300, falling over 150 points, while the Sensex shed over 500 points.

There was all-round selling visible among sectors such as banks, automobiles, FMCG, metals, pharmaceuticals and IT too. The Nifty Midcap index fell over a percent and that too weighed on the benchmarks.

Tuesday’s fall marked the second consecutive session of a bearish trade. Benchmarks were set for biggest two-day fall in over seven months, according to a report on CNBC-TV18. HDFC Bank, ICICI Bank and Yes Bank contributed over 80 percent to the fall in Bank Nifty.

Despite a positive opening, there was a sharp selloff in the Indian rupee in the afternoon. The currency fell to a fresh intraday low of 72.74 per US dollar and is was hovering around 72.67 per dollar, at the time of writing this report.

Investors are also likely to have placed a negative bet on the fact that Supreme Court stayed Reserve Bank of India’s (RBI) circular with respect to power, shipping and sugar companies.

The opening minutes witnessed some volatility, with benchmarks giving up gains in the first few minutes as well. There was some rangebound move through the morning till lunch. A sharp selloff in the afternoon dragged equities lower and pushed it lower as well.

At the close of market hours, the Sensex was down 509.04 points or 1.34% at 37413.13, while the Nifty fell 150.60 points or 1.32% at 11287.50. The market breadth is negative as 866 shares advanced, against a decline of 1,818 shares, while 163 shares were unchanged.

Coal India, NTPC and M&M were the top gainers, while Tata Steel, Power Grid and Titan lost the most.

“Selling pressure intensified as negative Asian cues and global trade war concerns impacted investor sentiment. Both the benchmark Sensex and the Nifty nosedived towards the end of the trading session to finally close the day with losses of over 1%. Trade remained a focal point for markets, with Canada and the US yet to secure a deal that would replace the North American Free Trade Agreement,” Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund said in a statement.

Stocks in news

Shares of Reliance Home Finance fell 8 percent after adding 4 percent in the morning even as the company reported strong numbers for the quarter ended June 2018.

Essel Propack fell over 2 percent after gaining 2.5 percent as the company issued commercial papers (CP) for Rs 60 crore on private placement basis.

Deutsche Bank has maintained hold call on Tata Global Beverage with a target of Rs 285. The stock fell around 3 percent.

Research house Macquarie has maintained outperform rating on Ujjivan Financial Services with a potential upside of 40 percent. The stock ended around 2 percent lower.

Sheela Foam ended 4 percent higher after brokerage house Edelweiss initiated coverage on Sheela Foam with a buy call and a target price of Rs 2,010.

Glenmark Pharma lost over 2 percent even as Bank of America Merrill Lynch (BofAML) raised target price on Glenmark Pharma to Rs 715 from Rs 600 apiece.

Global Cues

Equities in Asia were mixed as markets in Hong Kong, among others, ended in the red. Investors were bearish on worries of global trade wars.

Meanwhile, markets in Europe turned negative as here too investors chose to focus on trade war concerns. Stoxx 600 was 0.32 percent lower with the majority of sectors trading in negative territory.

Going forward, experts anticipate weakness to continue as well. “The near term direction will be dictated by key domestic macro data like July IIP, Aug CPI (due tomorrow) & August WPI (due on September 14). Further, the strengthening crude oil prices, weakening rupee (vs USD), widening CAD and mounting tensions over trade war is certainly a worrisome factor for the Indian market and could continue to induce high volatility in the index. We advise investors and traders to remain selective in stock picking,” Jayant Manglik, President, Religare Broking said in a statement.

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