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An evening walk down D-St: RIL clocks 10% gains, but markets tank; here#39;s why

August 13
19:06 2019

A terrible Tuesday! The Sensex on August 13 slipped below 37,000, while the Nifty failed to hold on to 11,100-11,000 levels on muted global and domestic cues.

Escalating concerns over the US-China trade war, protests in Hong Kong and Argentina crash unnerved global investors.

At home, sentiment took a hit after finance minister Nirmala Sitharaman in an August 9 meeting with foreign portfolio investors gave no hint of withdrawing a proposal to raise their taxes, an issue that has been roiling the market.

The final tally on D-Street: the Sensex down 623 points at 36,958 and the Nifty down 183 points at 10,925, the biggest single-day fall in a month.

The broader markets, too, ended lower with BSE Midcap and Smallcap losing 2.4 percent and 1.5 percent, respectively.

Barring oil and gas, which ended 1.1 percent higher led by Reliance Industries, all the other sectoral indices saw heavy selling pressure with auto, capital goods and power closing in the red in the range of 2.7-3.9 percent.

Even the best-day-in-a-decade performance by Reliance Industries Ltd stock following its AGM couldn’t save the day for Indian markets. Sell-off was pervasive across sectors, fuelled by less-than-inspiring Indian corporate results and weakening rupee, Jagannadham Thunuguntla, Senior VP and Head of Research (wealth), Centrum Broking Limited, told Moneycontrol.

Market participants were eagerly awaiting pro-market measures by the government, he said.

 Stocks in news

Shares of RIL surged 9 percent after chairman Mukesh Ambani set a target of making the company debt free in 18 months. The stock added about Rs 70,000 crore to its market cap in a single trading session.

Shares of Motherson Sumi Systems fell 9 percent after dismal June quarter numbers.

Sun Pharmaceutical Industries rose nearly 4 percent after the company’s consolidated net profit rose 31 percent to Rs 1,387.5 crore, while revenue was up 16 percent at Rs 8,374.4 crore.

Shares of Cox & Kings locked at 5 percent lower circuit after the company withdrew the proposal to declare dividend.

Britannia Industries touched a 52-week low of Rs 2,491, a drop of 3 percent as brokerages cut the target price after the company reported its June quarter numbers.

Shares of Divi’s Laboratories fell more than 8 percent as global brokerage HSBC downgraded the stock and cut price target after June earnings fell short of analysts’ expectations.

Sun TV Network fell 6 percent to a three-year low, as global brokerages slashed price target after weak Q1 earnings.

Global update

European shares fell as negative news from around the globe, including Italy and Argentina’s political uncertainty, and persistent unrest in Hong Kong, compelled investors to take refuge in safe harbours such as bonds and gold, reported Reuters.

These factors were also at play in Asian markets that fell for the third straight day, keeping investors huddled in bonds, gold, and the Japanese yen for safety.

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