Sensex plunges 516 points on RBI rate cut, Nifty settles below 7,600; footwear stocks rally

By: | Updated: April 5, 2016 4:51 PM

The BSE Sensex closed 516.06 points, or 2.03 per cent, down at 24,883.59, while Nifty index settled 167.15 points, or 2.15 per cent, lower at 7,591.65.

RBI, LIVE SENSEX, SENSEX, NIFTY, BSE, NSE, banking stocksBenchmark indices BSE Sensex and NSE Nifty tanked over 2 per cent on Tuesday, despite the Reserve Bank of India (RBI) slashing the repo rate by 25 basis points

Benchmark indices BSE Sensex and NSE Nifty tanked over 2 per cent on Tuesday, despite the Reserve Bank of India (RBI) slashing the repo rate by 25 basis points, which was in line with market expectations. Bleak global cues and profit booking in rate sensitive stocks dampened market sentiments.

The BSE Sensex closed 516.06 points, or 2.03 per cent, down at 24,883.59, while Nifty index settled 167.15 points, or 2.15 per cent, lower at 7,591.65.

In the Nifty pack, 47 stocks ended the day in red with Adani Ports falling the most — 6.62 per cent, followed by State Bank of India (5.62 per cent), ICICI Bank (down 5.38 per cent), Bharti Airtel (down 5.22 per cent) and Bank of Baroda (down 5.15 per cent). On the other hand, BPCL, Power Grid, HCL Tech and Lupin gained 0.59 per cent, 0.25 per cent, 0.21 per cent and 0.07 per cent, respectively.

Volumes for Nifty stocks stood at 2,099 lakh, higher than Monday’s volumes of 1,602 lakh for Nifty stocks.

Sectorwise, the BSE Consumer Durables index (up 0.26 per cent) stood the only gainer in the BSE sectoral indices list. Rest all other indices ended the day in red. The BSE Telecom index, BSE Bankex and BSE Auto index plunged 3.71 per cent, 3.21 per cent and 2.82 per cent, respectively.

Vinod Nair, head of research, Geojit BNP Paribas Financial Services, said, “Today’s sharp correction does not make us feel that market is overreacting to the RBI’s decision as investors had already got 25 bps cut in interest rate. The emphasis on liquidity is a positive action and it may help to limit further steep correction in the medium-term. Now the investors will focus towards global market and Q4FY16 results which will kick start from next week.”

As widely expected by the markets, RBI governor Raghuram Rajan cut key interest rates by 25 basis points, taking repo rate to 6.5 per cent. RBI kept CRR unchanged at 4 per cent but reduced the minimum daily maintenance of CRR from 95 per cent to 90 per cent. RBI also narrowed the policy rate corridor from 100 bps to 50 bps which would mean, reverse repo would now stand at 6 per cent and MSF would stand at 7 per cent.

Among day’s other major market moving events, shares of DLF, Indiabulls Housing and Apollo Tyres extended their losses on Tuesday after the Finance minister in consultation with PM Narendra Modi, set up a probe to cover 500 Indians, including the promoters of above companies amidst the recent leaks made by Panama Papers. DLF shares closed 4.51 per cent down at Rs 113.30, Indiabulls Housing Finance shares slid 2.84 per cent while Apollo Tyres closed 3.33 per cent down at Rs 165.55.

On the other hand, Relaxo Footwear rallied 13.78 per cent while Liberty Shoes rallied by 4.40 per cent on BSE over the news. Achin Goel, head, wealth management and financial planning, Bonanza Portfolio said, “Shares of footwear stocks rallied in Tuesday’s session after the AAP government rolled back the 5 per cent hike in VAT on low-cost footwear.”

Selling got intensified after European counters have made a feeble start on Tuesday, with CAC, DAX and FTSE were trading with a cut of around two percent. Asian equity indices ended mostly in red pressured by slumping crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for US interest rate rises.

Most of the Asian markets suffered sharp sell-off on Tuesday, as the oil resumed its plunge on uncertainty of an output cut at the upcoming OPEC and Non- OPEC members meet. Traders also remained concerned ahead of the releases of US Federal Reserve’s minutes from its latest meeting on Wednesday and struggled to find fresh reasons to buy. The Japanese markets witnessed cut of over two percent after the yen jumped to a 17-month high. Also, the latest survey from Nikkei revealed that activity in Japan’s services sector remained unchanged in March. The Hong Kong markets too lost around two per cent, however the Shanghai Composite Index that resumed trading after a Monday holiday, bucked the regional trend and gained 1.4 per cent, as investors digested better-than-expected manufacturing surveys released over the weekend.


 

3.30 pm: The BSE Sensex closed 516.06 points, or 2.03 per cent, down at 24,883.59, while Nifty index settled 167.15 points, or 2.15 per cent, lower at 7,591.65.

3.07 pm: Sensex tumbled 501.89 points, or 1.98 per cent, in the last half an hour of trade. Nifty was trading 144 points down at 7,614.

2.47 pm: Barring the BSE Consumer Durbales index (up 0.45 per cent), rest all other sectoral indices were trading in red. The BSE Bankex and BSE Realty index were down by 2.41 per cent and 2.12 per cent, respectively.

2.44 pm: Nandan Denim has received the third tranche amounting to Rs 12.50 crore from Polus Global Fund towards the 25,00,000 convertible warrants allotted to them at a conversion price of Rs 200 each pursuant to receipt of shareholders approval at the Annual General Meeting of the company held on September 29, 2015 and subsequent approvals from the stock exchanges. Shares of Nandan Denim were trading 1.17 per cent down at Rs 118. Sensex was down 390.56 points, or 1.54 per cent, at 25009. Nifty was trading 117.10 points, or 1.51 per cent, down at 7,641.70.

2.03 pm: 47 stocks in the Nifty 50 pack were trading in red. Power Grid (up 0.79 per cent), BPCL (up 0.56 per cent) and Lupin (up 0.24 per cent) were only gainers in the index.

1.54 pm: The 30-share index was down 433 points at 24,966. Meanwhile, Snowman Logistics informed bourses that it has completed construction of its Jaipur warehouse and the warehouse is now ready for operations with a capacity of 4200 pallets, thereby taking the total capacity of the company to 98,500 pallets. However, shares of the company were trading 2.83 per cent down at Rs 53.20.

1.53 pm: The BSE Sensex will recoup this year’s losses and rally about 10 percent from here to the end of December on further improvement in the domestic economy, which is already outperforming most in Asia, a Reuters poll found.

1.23 pm: Sensex was trading 415.61 points, or 1.64 per cent, down at 24,984.04. Shares of IT firm Mphasis rose by over 4 per cent on Tuesday after the US-listed Blackstone said it will invest up to Rs 7,071 crore to acquire a majority stake in the mid-sized IT services exporter from Hewlett Packard Enterprise.

1.14 pm: In the 50-share index, BPCL, Power Grid, HUL, Lupin and HCL Technologies shares were up between 0.35 per cent and 2.10 per cent. On the other hand, Adani Ports, Tata Motors DVR, ZEEL, Bharti Infratel and Idea Cellular were down between 1.89 per cent and 3.30 per cent. Nifty was trading 119.55 points down at 7,639.

12.35 pm: Meanwhile, pharma major Lupin announced that its US subsidiary, Lupin Pharmaceuticals Inc. (collectively Lupin) has launched the first product from its GAVIS pipeline, Zolpidem Sublingual Tablets, 1.75 mg & 3.5 mg to market a generic equivalent of Purdue Pharma L.P’s Intermezzo Sublingual Tablets, 1.75 mg & 3.5 mg, having received final approval from the United States Food & Drug Administration (FDA) earlier, as well as final clearance from the FTC with 180 days of exclusivity. Shares of Lupin were trading 0.66 per cent up at Rs 1,470.95. Sensex was down 364 points at 25,035.

12.08 pm: Bharti Airtel and Idea Cellular were trading down by 3.41 per cent and 2.56 per cent respectively. ICICI Securities in a research note said, “We expect performance of voice business to improve sequentially on the back of higher minute growth for Bharti Airtel India and rise in voice RPM for Idea Cellular (Idea). Bharti Airtel India’s voice RPM QoQ is likely to be impacted from robust subscriber addition (7.0mn net additions in Q4FY16). Idea’s voice RPM is likely to rise QoQ albeit minute growth to decelerate.”

12.03 pm: Market benchmark Sensex plunged further after the Reserve Bank cut repo rate by 25 basis points, which was in line with market expectations, and was trading down by 357 points at 25,042.12, while the broader NSE Nifty slipped below the crucial 7,700-mark.

11.59 am: Sensex was down 303.32 points at 25096.33. READ MORE: Rate sensitive stocks under pressure post RBI rate cut

11.55 am: Sensex was down 276 points at 25,123. On the rate cut, Murthy Nagarajan, head-fixed income, Quantum AMC, said, “The RBI rate reduction was as expected but its measures on liquidity is an attempt to improve and speed up the transmission. Its move to bring system liquidity to neutral along with the narrowing of the corridor to 50 bps and CRR maintenance at 90 per cent will allow overnight rates to remain very close to the repo rate or even drift marginally lower.”

11.22 am: NIFTY TOP GAINER AND LOSERS

nifty top gainer loser after rate cut Source: NSE

 

11.16 am: Sensex was down 156 points at 25,242. RBI sees 7th pay commission impact on inflation at 100-150 bps over the next two years. It also expects FY17 CPI at around 5 per cent.

11.01 am: RBI kept CRR unchanged at 4 per cent.

11 am: Meanwhile, the Reserve Bank of India (RBI) on Tuesday slashed the repo rate by 25 basis point (at which the central bank lends to commericial banks). Sensex plunged 284 points to 25,115.

10.40 am: Hindustan Unilever (HUL) has completed the transaction for sale and transfer of its bread and bakery business under the brand ‘Modern’ to Nimman Foods (now known as Modern Food Enterprises), an investee company of the Everstone Group. Accordingly, the ‘Modern’ business stands transferred to Modern Food Enterprises. The company had earlier on September 08, 2015 entered into an agreement for the same. HUL shares were trading 0.95 per cent up at Rs 880.25. Sensex was down 143.92 points at 25,255.

10.17 am: Sensex was trading 158.01 points down at 25,241.64. Brokers said besides a weak trend at other Asian bourses following overnight losses in the US markets, offloading of positions by participants ahead of RBI’s first bi-monthly monetary policy for 2016-17 to be announced later in the day, influenced the sentiment. Nifty was down 39.45 points down at 7,719.35.

10.07 am: SpiceJet shares advanced on adding fourth non-stop flight on Chennai-Hyderabad route. The scrip was trading 1.32 per cent up at Rs 69.15 in the morning trade.

9.38 am: IFCI shares were trading 2.45 per cent up at Rs 25.10. The company has made partial disinvestment to the extent of 1,50,000 number of equity shares of National Stock Exchange of India (NSE) at the rate of Rs 3,950 per equity share, amounting to Rs 59.25 crore.

9.16 am: Sensex plunged further and was trading 107.28 points, 0.42 per cent, down at 25292.37. Nifty was down 37.90 points at 7,720.90. Oil marketing companies such as IOC, BPCL, HPCL were trading higher in the early trade on Tuesday. Petrol price on Tuesday hiked by Rs 2.19 a litre and diesel by 98 paise per litre. Petrol in Delhi will cost Rs 61.87 per litre as against Rs 59.68, said Indian Oil Corporation, the nation’s biggest fuel retailer.

9.15 am: Benchmark index BSE Sensex opened 27.21 points, or 0.11 per cent, down at 25,372.44. NSE Nifty opened 22.50 points, or 0.29 per cent, down at 7,736.30.

8.45 am: The BSE Sensex and NSE Nifty are likely to open in red on Tuesday tracking Nifty futures on the Singapore Stock Exchange (SGX Nifty) and weak global cues.

The Reserve Bank of India (RBI) is expected to cut its policy interest rate by a quarter percentage point on Tuesday, lowering it to a more than five-year low while dangling the prospect of another cut later this year if inflation trends stay benign.

At 8.35 am (IST), SGX Nifty was trading 61 points, or 0.79 per cent, down at 7,724.50.

Asian shares and other riskier assets skidded on Tuesday, pressured by slumping crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for US interest rate rises.

The US market closed lower on Monday, as losses for industrials and materials offset sharp gains in health-care shares. The Dow Jones Industrial Average lost 55.75 points or 0.31 percent to 17,737.00, Nasdaq dropped 22.74 points or 0.46 percent to 4,891.80 while, S&P 500 was down by 6.65 points or 0.32 percent to 2,066.13.

Back home, rate sensitive stocks will remain in focus on Tuesday on account of monetary policy review which is scheduled later in the day.

The benchmark Sensex rose 130 points to 25,399.65 on Monday on recovery in European stocks from early losses and hopes that Reserve Bank will cut interest rates on Tuesday.

(With agency inputs)

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