While there are chances of an intraday rebound in indices, a fresh downmove seems to have started
We had mentioned in Wednesday’s closing report that Nifty, Sensex were headed sideways with a negative bias and that only if Nifty decisively crosses 8,530, bulls have a chance. In a volatile session, the major indices in the Indian stock market fell sharply by 1%-2%. A continuous slide in the Chinese markets, strain in US stocks and uncertainty over the recommendations on retrospective tax subdued investor sentiments in the Indian equity markets on Thursday.
Bearish sentiments were seen to rule on the S&P Bombay Stock Exchange (BSE) with its barometer 30-scrip sensitive index (Sensex) closing 324 points or 1.16% down. Nifty of the National Stock Exchange (NSE) closed 122.40 points or 1.44% in the red at 8,372.75 points.
Analysts pointed out that weak global cues coupled with uncertainty over the government's retro-tax committee's report dampened the Indian markets. The negative bias washed out healthy macros like announcements about new banks licences and global slide in commodity prices, especially crude oil.
The most significant source for downside for the day emanated from US and Chinese markets. Concerns about the Chinese markets have grown after various efforts by the government, brokerage firms and mutual funds there have failed to arrest the fall.
Investors were also cautious about the growing possibility of US raising its interest rate after a decade of easy financing. The intent was made clear by the minutes of the last Federal Open Market Committee (FOMC) meet which was held on July 28-29.
Higher interest rates in the US are expected to lead the FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
The markets were also anxious to know the government's position on the recommendations made by the Justice AP Shah committee on minimum alternate tax (MAT).
The MAT issue on capital gains tax is expected to impact the margins of foreign funds. This might impact the inflows from the FPIs into Indian stock markets.
At the same time, the rupee touched a new two-year low in the intra-day trade at Rs65.69 to a dollar -- the lowest since September, 2013. It later closed at Rs65.56.
Sector-wise, all 12 indices of the BSE except for fast moving consumer goods (FMCG) and healthcare stocks closed in the red.
The S&P BSE FMCG index rose by 106.10 points and the healthcare index gained 68.94 points.
On the other hand, the S&P BSE banks index plunged by 499.82 points, automobile index receded by 353.22 points, capital goods index declined by 328.92 points, information technology (IT) index lost 269.65 points and consumer durables index dropped by 214.12 point.
Major Sensex gainers in Thursday's trade were: Lupin, up 5.39% at Rs1,892.10; ITC, up 3.90% at Rs329; Dr Reddy's Lab, up 1.54% at Rs4,297; and Sun Pharma, up 0.91% at Rs935.65.
The major Sensex losers were: Vedanta, down 4% at Rs98.50; Axis Bank, down 3.68% at Rs534.20; Reliance Industries, down 3.55% at Rs918.85; BHEL, down 3.30% at Rs253.35; and Tata Steel, down 3.30% at Rs241.65.
Among the Asian markets, Japan's Nikkei fell by 0.94%, Hong Kong's Hang Seng dropped by 1.77% and China's Shanghai Composite Index lost 3.39%.
The top gainers and top losers in the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below:
Among European indices, DAX was at 10,557.71, down 1.16% and FTSE 100 was at 6,370.13, down 0.52%.