Falling Re, rising crude sink Nifty below 5800
The Indian equity market ended in the red, extending its losing streak to the second consecutive day. It started weak and continued that trend with the surfeit of negative news. Any signs of a pullback from lower levels were met with huge selling pressure. The Sensex closed at 19,177, down 286 points, while the Nifty ended lower by 87 points at 5,770 over Tuesday’s close.
The weakening rupee continued to play spoilsport by falling 90 paise in trade today. It slipped below the 60 per dollar mark after hitting an intra-day low of 60.44. This is the first time since June 27 that the Indian currency has fallen below the 60 level. On June 26, it touched an all-time low of 60.76 against the dollar.
Amar Ambani, Head of Research at IIFL, sees the rupee depreciate to 63 per dollar by July-end. “Positive US factory data for May has raised concerns that the Federal Reserve may rollback its stimulus earlier than usual.”
On the global front, China’s services sector showed weak growth in June. The June services Purchasing Managers’ Index fell to 53.9 from May’s 54.3. It remained above the 50 level dividing expansion from contraction.
Crude prices surged on account of political tensions in Egypt. The country, though not an oil producer, controls the Suez Canal. It is one of the world’s busiest shipping lanes through which majority of the world’s energy passes. Oil marketing companies witnessed intense selling pressure with stocks like BPCL, HPCL and IOC plummeting nearly 4%.
Among sectors, barring defensives like pharmaceuticals and FMCG, all other sectoral indices ended in the red. The top losers were realty, metals, consumer durables, oil and gas, power, and capital goods stocks.
Stocks in news:
JP Associates, Bank of Baroda, IDFC, Punjab National Bank, Sesa Goa, Tata Steel, Tata Power, SBI, DLF, Hindalco and BPCL lost out while Lupin, Jindal Steel, Sun Pharmaceutical, Ambuja Cement, ITC, HCL Technologies and Grasim gained today.
The advance-decline ratio favoured the bears. On the Bombay Stock Exchange, 1,525 stocks declined against 780 advances, while 129 stocks remained unchanged.
Volatility, as measured by India VIX, gained 3.8% to 18.91. It hit a day’s high of 19.13 and low of 17.81.
Hindustan Copper’s offer-for-sale was over-subscribed 1.18 times on Wednesday. The floor price was set at Rs. 70 per share. The stock closed at Rs. 70.20, down Rs. 2.15 or 3%.
Oil India closed at Rs. 554.30 per share, down Rs. 12.15 or 2.1%, despite the company announcing plans to invest Rs. 120bn by 2017. The state-run oil major is looking to invest in various projects in the north-east involving expansion of exploration work and diversification of business.
Tata Power ended weak at Rs. 82.80, down Rs. 3.9 or 4.5%. The company plans to tie-up funds for the 95 MW South Africa’s Tsitsikamma wind energy project, estimated to cost about Rs 1,750 crore.
Bharti Airtel surged Rs. 8.85 or 2.9% at Rs. 294 per share after the Telecom Commission enhanced the foreign direct investment limit in the sector from 74% to 100%.
However, peer Idea was down Rs. 1.20 or 0.8% while Reliance Communications closed at Rs. 131.40, up Rs. 0.45 or 0.3%.