Market Review: Sensex shows weekly loss of 228 points on Brexit

By: | Updated: June 27, 2016 6:19 PM

Heavy selling pressure from operators and investors at the fag-end of week due to sharp fall in global markets as UK voted for Brexit, pulled down the sensex by 228 points and Nifty by 82 points.

The S&P BSE sensex resumed lower at 26,497.11 and hovered in a range of 27,060.98 and 25,911.33 before ending the week at 26,397.71, showing a loss of 228.20 points or 0.86 per cent. (Reuters)The S&P BSE sensex resumed lower at 26,497.11 and hovered in a range of 27,060.98 and 25,911.33 before ending the week at 26,397.71, showing a loss of 228.20 points or 0.86 per cent. (Reuters)

Heavy selling pressure from operators and investors at the fag-end of week due to sharp fall in global markets as UK voted for Brexit, pulled down the sensex by 228 points and Nifty by 82 points.

Pounded by Brexit, stocks and rupee went into a tailspin with the Sensex taking 1,090-point during the intra-day trade on Friday and rupee crashing by 97 paise but late buying by domestic institutions and talking-up by policymakers helped recoup some losses.

The S&P BSE sensex resumed lower at 26,497.11 and hovered in a range of 27,060.98 and 25,911.33 before ending the week at 26,397.71, showing a loss of 228.20 points or 0.86 per cent.

The 50-share Nifty also dropped by 81.60 points or 1 per cent to close the week at 8,088.60 after moving in a range of 8,285.60 and 7,927.05.

Domestic stocks, which had plunged 1,090 points in early trade on Friday, recouped some of the losses on value-buying and reassuring words by policymakers including Finance Minister Arun Jaitley and RBI Governor Raghuram Rajan.

“Brexit has come as a shocker to markets who were expecting Britain to remain in the EU. There was mayhem in global markets as the news trickled in, though some semblance of normalcy came in the final hour of trading on Friday,” Hariprasad M P, Senior Vice-President & Head Treasury & Banknotes Business, Centrum Direct said.

In a deadly blow to the 28-nation bloc, Britain voted to leave the EU, forcing Prime Minister David Cameron to announce resignation in the wake of defeat in the historic referendum, whose result triggered a panic reaction in world markets.

Meanwhile, in sweeping reforms, the government decided on Monday to ease FDI norms in civil aviation, single-brand retail, defence and pharma by permitting more investments under automatic route – a decision which some people said could have been advanced to counter Rexit jitters in markets.

Meanwhile, foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) sold shares worth net Rs 539.42 crore during the week as per Sebi’s record, including the provisional figure of June 24.

In the broader market, the BSE Mid-Cap index slipped 45.65 points or 0.4 per cent to settle at 11,313.41.

The fall in the index was lower than the Sensex’s decline in percentage terms. The BSE Small-Cap index declined 156.53 points or 1.37 per cent to settle at 11,278.63.

The fall in the index was higher than the Sensex’s decline in percentage terms.

Among the S&P BSE sector and industry indices, Realty fell by 3.59 per cent followed by Capital Goods (2.46 per cent), Power (2.34 per cent), Metal (1.95 percent), Bankex (1.64 per cent), FMCG (1.38 per cent), Oil & Gas (0.52 per cent), Tech (0.30 per cent), Auto (0.30 per cent and IT (0.15 per cent), while Healthcare rose (0.55 per cent) and Consumer Durables (0.35 per cent).

Among the 30-share Sensex pack, 23 stocks declined and the remaining seven gained during the week.

Tata Steel was the biggest sensex loser, falling by 3.99 per cent.

Results from the UK’s referendum on its European Union membership showed the country had voted to leave the trading bloc.

Tata Steel is Europe’s second largest steel producer, with steel-making in the UK and Netherlands and manufacturing plants across Europe.
Tata Steel Europe has initiated the process to sell its UK business viz Tata Steel UK. It has invited seven short-listed potential investors to submit binding bids for Tata Steel UK.

Tata Steel was followed by Axis Bank (3.10 per cent), Tata Motors (3.07 per cent), ICICI Bank (3.06 per cent), Larsen (3.02 per cent), Gail (2.54 per cent), Adani Ports (2.39 per cent), Reliance (2.23 per cent), NTPC (2.07 per cent) and HUL (2.05 per cent).

On the other hand, Dr Reddy’s Laboratories gained 4.82 per cent followed by Bajaj Auto (4.36 per cent), M&M (2.60 per cent), Sun Pharma (1.47 per cent), Infosys (1.37 per cent) and Hero Motoco (1.36 per cent).

The total turnover during the week on the BSE fell to Rs 13,849.91 crore from last weekend’s level of Rs 13,981.67 crore while NSE rose to Rs 85,554.83 crore from Rs 82,214.61 crore.

Forex: Spooked by Brexit impact, the rupee plunged as much as 88 paise to settle at a 4-month low of 67.96 against the dollar on persistent dollar demand from banks and importers on the back of higher dollar in the global markets amid a sharp fall in equities.

The rupee opened sharply lower at 67.65 per dollar as against the last weekend’s level of 67.08 per dollar at the Interbank Foreign Exchange (forex) market and went down further to 68.22 per dollar on heavy dollar demand from bankers and importers before ending at 4-month low at 67.96 per dollar, still showing a loss of 88 paise or 1.31 per cent.

The rupee has dropped by 120 paise or 1.80 per cent in two weeks.

The rupee recovered slightly at end of the week after initial losses following intervention of the Reserve Bank (RBI) coupled with rebound in equities.

The rupee had last ended at 68.42 on February 29, 2016.

The domestic currency hovered in a range of 67.23 and 68.22 during the week.

The British pound pushed to its lowest since 1985 against the dollar in the global market on Friday. After briefly plunging to its weakest level in more than 30 years, the pound trimmed its earlier losses to finish at a more-than six year low against the dollar.

In a historic decision, the UK voted to leave the European Union in a long-awaited referendum, plunging global markets in chaos.

Meanwhile, Foreign portfolio investors (FPIs) pumped in a net USD 13.27 million in first four days of the week as per the Sebi’s record.

In the forward market, premium for dollars slipped on receipts from exporters.

The benchmark six-month forward dollar premium payable in November declined to 178-180 paise from preceding weekend’s level of 191-193 paise and far-forward contracts maturing in May also fell to 371-373 paise from 386-388 paise.

The RBI fixed the reference rate for the USD at 68.01 and the euro at 75.10 as against the last weekend’s level of 67.16 and 75.45, respectively.

In cross-currency trade, the rupee rose further against the pound to conclude at 93.13 from last Friday’s level of 95.86 and also firmed up against the euro to settle at 74.80 from 75.53 previously.

Further, the rupee fell against the Japanese Yen to 66.26 per 100 yen compared with 64.38 last weekend.

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