1. Falling crude price, China oil slide in markets, rupee

Falling crude price, China oil slide in markets, rupee

India’s benchmark stock index tumbled to a three-month low on Tuesday and the rupee weakened for a fifth day as investors weighed the benefits of lower energy prices against declines in global equities.

By: | Mumbai | Published: December 9, 2015 1:35 AM
BSE Sensex

The Sensex lost 0.9% to 25,310.33 points at the close in Mumbai. (Express Photo)

India’s benchmark stock index tumbled to a three-month low on Tuesday and the rupee weakened for a fifth day as investors weighed the benefits of lower energy prices against declines in global equities. The rupee dropped 0.2% to 66.84 a dollar. The currency, which fell 2.1 % last month in Asia’s worst performance, is set for the longest run of declines since August.

The Sensex lost 0.9% to 25,310.33 points at the close in Mumbai. The benchmark has fallen 8% this year and trades at 14.9 times projected 12-month earnings, the least expensive in two months. The 50-share Nifty ended down 0.8% at 7701.7 points; with this fifth straight session of losses, Indian markets now trade at about 15% below their all-time closing highs touched in early 2015.

The MSCI Emerging Markets Index has lost 17% and is valued at a multiple of 11. Overseas investors sold a net $6.3 million of Indian stocks on December 7, paring this year’s inflows to $2.9 billion. They sold $1.1 billion last month.
Asian stocks dropped 1.3% after China’s exports declined for a fifth month, while oil slid amid speculation a global glut will persist with Opec having abandoned its strategy of limiting output.

Vedanta plunged 4.5 %, extending the year’s loss to 59%. Hindalco tumbled 4.1%, the most since November18. ONGC slid 3.6% to its lowest price since May 2009as crude traded near a six-year low. GAIL India, the top gas-marketing company, tumbled the most since August 24 while Coal India lost 2.9%, a two-month low.

Market watchers said the limited progress on the goods and services Bill was a concern to investors. The Bill has been repeatedly blocked by Prime Minister Narendra Modi’s opponents. The unified sales tax is one of India’s biggest economic reforms since the early 1990s.

The weak economic data from China also hurt sentiment. China’s imports fell for a record 13th straight month, albeit at a slower-than-estimated pace. The drop is a drag on other economies as the nation’s flagging industrial plants need less raw materials while robust consumer demand hasn’t picked up fast enough to offset those declines. Oil has plunged about 40% in the past year while iron ore trades at a record low.

Gr6

India’s benchmark stock index tumbled to a three-month low on Tuesday and the rupee weakened for a fifth day as investors weighed the benefits of lower energy prices against declines in global equities. The rupee dropped 0.2% to 66.84 a dollar. The currency, which fell 2.1 % last month in Asia’s worst performance, is set for the longest run of declines since August.

The Sensex lost 0.9% to 25,310.33 points at the close in Mumbai. The benchmark has fallen 8% this year and trades at 14.9 times projected 12-month earnings, the least expensive in two months. The 50-share Nifty ended down 0.8% at 7701.7 points; with this fifth straight session of losses, Indian markets now trade at about 15% below their all-time closing highs touched in early 2015.

The MSCI Emerging Markets Index has lost 17% and is valued at a multiple of 11. Overseas investors sold a net $6.3 million of Indian stocks on December 7, paring this year’s inflows to $2.9 billion. They sold $1.1 billion last month.
Asian stocks dropped 1.3% after China’s exports declined for a fifth month, while oil slid amid speculation a global glut will persist with Opec having abandoned its strategy of limiting output.

Vedanta plunged 4.5 %, extending the year’s loss to 59%. Hindalco tumbled 4.1%, the most since November18. ONGC slid 3.6% to its lowest price since May 2009as crude traded near a six-year low. GAIL India, the top gas-marketing company, tumbled the most since August 24 while Coal India lost 2.9%, a two-month low.

Market watchers said the limited progress on the goods and services Bill was a concern to investors. The Bill has been repeatedly blocked by Prime Minister Narendra Modi’s opponents. The unified sales tax is one of India’s biggest economic reforms since the early 1990s.

The weak economic data from China also hurt sentiment. China’s imports fell for a record 13th straight month, albeit at a slower-than-estimated pace. The drop is a drag on other economies as the nation’s flagging industrial plants need less raw materials while robust consumer demand hasn’t picked up fast enough to offset those declines. Oil has plunged about 40% in the past year while iron ore trades at a record low.

India’s equity markets have witnessed a sell-off by foreign investors of $900 million in the last 11 sessions, Bloomberg data showed. The selling started in May when global investors started pulling out money from emerging markets over the concerns about China’s economy. During the quarter ended September, foreign portfolio investors sold equities worth $2.57 billion.

Tuesday’s session was also bad for steel companies as the BSE Metal Index slumped 3.25%. Shares of Jindal Steel, SAIL and Vedanta slipped more than 4.5% during the session. Weak steel prices in global markets and an increase in imports from China have affected Indian steel companies during 2015. “Recent domestic steel demand data appears positive, but weak global steel fundamentals, falling global prices and imports will continue to weigh on domestic steel prices. Domestic steel prices remain under pressure, as domestic prices are largely driven by import parity and a sharp fall in Chinese steel prices has negated the 20% safeguard duty imposed on HRC in September,” said US investment banking firm Jefferies in a note to investors.

(With Bloomberg inputs)

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