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Monday 20 April 2015

Sensex crashes 556 pts, Nifty slips 1.8%; Reliance falls 4%

03:30 pm Market close: The Sensex is down 555.89 points or 1.9 percent at 27886.21 and the Nifty is down 157.90 points or 1.8 percent at 8448.10. About 897 shares have advanced, 1951 shares declined, and 155 shares are unchanged.

Reliance lost 5 percent and Hero Motocorp fell 4 percent. Other laggards were HDFC, Cipla and M&M. Top gainers are ICICI Bank and Sun Pharma.

03:10 pm Warning: Earnings disappointments in the first few results and already low expectations could result in further market correction, says Sanjeev Prasad, Kotak Equities. Other global events (Grexit) and domestic issues (tax notices to FIIs for past income) could also affect sentiment. He sees potential correction in the high-growth quality stocks if investors start questioning Street’s earnings assumptions. In an interview , Prasad says valuations would remain heady even with a 15-20 percent correction.

The Sensex is down 532.49 points or 1.9 percent at 27909.61 and the Nifty is down 148.30 points or 1.7 percent at 8457.70. About 788 shares have advanced, 1992 shares declined, and 158 shares are unchanged.

02:56pm Rupee Check: The rupee slumped to its weakest in over a month after a spurt in dollar outflows triggered by the greenback's strength globally as well as weaker shares, traders said.

The rupee was trading at 62.8450/8550 to the dollar, compared with 62.36/37 on Friday. The rupee had fallen to as much as 62.86 to the dollar, its lowest since March 16.

Shares were also headed for their biggest single-day fall in nearly a month on worries over retrospective taxation for foreign institutional investors.

02:50pm Market Update: Equity benchmarks extended losses in last hour of trade, falling more than 2 percent. The Sensex crashed 621.91 points to 27820.19 and the Nifty plunged 179.20 points to 8426.80.

About 740 shares have advanced, 2016 shares declined, and 148 shares are unchanged on the BSE.

02:45pm Chinese shares retreat: 

A cut in banks' reserve requirements announced by the People's Bank of China on Sunday was the largest since the global financial crisis, but markets reacted half-heartedly as traders focused on moves by the securities regulator which they feared could pop a gravity-defying, six-month rally.

Money market rates fell but corporate bond yields were largely flat, while the yuan weakened about 0.9 percent to 6.203 to the dollar by late afternoon.

Stocks had rallied early and at one point touched fresh seven-year highs, with the CSI300 of the largest listed companies in Shanghai and Shenzhen closing the morning session up 1.2 percent.

But those gains quickly evaporated in the afternoon on concerns that regulators want to slow the pace of gains in a market that has already bolted more than 80 percent since late November, thanks in large part to borrowed money.

Securities regulators announced on Friday they would allow fund managers to lend shares for short-selling, and ban margin financing through unregulated accounts.

Both the CSI300 index and the Shanghai Composite Index, which tracks all stocks on the Shanghai Stock Exchange, ended down 1.6 percent.

02:35pm Market Update: The Sensex fell more than 950 points and the Nifty cracked over 320 points in last four consecutive sessions.

Today, shares of ITC, Infosys, L&T, ONGC, HUL, M&M, Hero Motocorp, Cipla, Dr Reddy's Labs, Wipro and NTPC plunged 2-4 percent followed by HDFC, TCS, Axis Bank and Tata Motors with over 1 percent loss.

However, ICICI Bank bucked the trend, up 1.6 percent. Sun Pharma gained nearly a percent.

02:15pm Oil Check: 

"I have said many times we will always be happy to supply to our customers with what they want. Now they want 10 million," Naimi told Reuters on Monday in South Korea's capital Seoul, where he is due to attend a board meeting of the state oil firm Saudi Aramco.

Naimi earlier this month said Saudi Arabia produced 10.3 million bpd of crude in March, eclipsing a previous record of 10.2 million bpd, in what is seen as a move to defend market share against non-OPEC competition, including the United States.

US oil drilling rigs fell for a record 19th straight week to the lowest since 2010, data from Baker Hughes showed, which has helped lift prices from six-year lows reached in January.

Since the beginning of April, oil prices have risen around 17 percent, pushed up by reports of a possible dip in US output, but Morgan Stanley warned on Monday that Saudi production could be more important than developments in the United States.

02:00pm Market Check

The market extended losses in afternoon trade on concerns over tax-related issues for foreign investors. The Sensex plunged 429.71 points or 1.51 percent to 28012.39 and the Nifty slipped 124.25 points or 1.44 percent to 8481.75, dragged by oil, technology and FMCG stocks.

The broader markets continued to underperform benchmarks. The BSE Midcap Index dropped 1.6 percent and Smallcap lost 1.9 percent. More than two shares declined for every share advancing on the Bombay Stock Exchange.

Mahesh Nandurkar, CLSA said the 2015 Budget made it clear that the FIIs don't have to pay minimum alternate tax (MAT) on capital gains from April 2015 onwards. But, media reports indicate that the income tax authorities have issued notices to several foreign institutional investors pertaining to their MAT liabilities for prior years, he added.

According to him, clearly, India is not completely out of the 'tax claims pertaining to prior years' syndrome yet.

Reliance Industries was the biggest contributor to Sensex's fall, down 4.5 percent on profit booking post strong Q4 earnings. For More information please visit this site www.bigprofitbuzz.com

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