As many as six Nifty companies dropped to their 52-week low on Monday as Chinese stocks witnessed a renewed selloff despite government efforts to calm the market. Concerns that stronger regulatory rules may be applied to participatory notes (P-Notes) curtailing foreign investments in the market also weighed on Indian stocks.
In the BSE-500 universe as well, 5% constituents — or 26 stocks — fell to their 52-week lows on Monday, including as many as eight public sector banks. The meltdown in PSB stocks was led by IOB, OBC, Allahabad Bank, UCO Bank, Bank of India and Canara Bank, which lost 4-6% of their value on Monday. Meanwhile, debt-laden players, JP Associates and Lanco Infra each lost more than 5% of their value and joined the likes of Nalco, Jindal Steel & Power and MOIL in touching one-year lows in Monday’s trade.
China’s Shanghai Composite sank 8.5%, its biggest single-day fall in eight years, on concerns that the world’s second largest economy, which accounts for over 40% of the global consumption of major metals, has fallen into an acute slowdown.
As the sellof rubbed off on Indian equities, the broader Nifty closed at 8,361, down 161 points (1.9%), while the BSE metal index closed 2.3% lower from the previous close.
In the Nifty universe, while metal stocks accounted for half of these firms at this critical level, two energy stocks, along with Tata Motors, completed the list. Tata Steel plunged 5.4% and Vedanta slid 3%, extending its fall for a sixth consecutive trading session. Other metal counters, such as Hindalco, JSW Steel and SAIL, slid between 2.6-4.4% on Monday.
Tata Motors retreated to a 16-month low on worries of slowdown in the Chinese market – the biggest for its luxury car — a big cause for worry. The stock has lost about 37% since the peak it touched in the end of January this year. In the January-March quarter, sales of company’s Jaguar Land Rover (JLR) unit fell 20% compared to a 36% growth in the same quarter of FY14. As a result, the car-maker reported a 56% y-o-y decline in its quarterly net profit to Rs 1,716.5 crore.