While the market indices may put in a short bounce, the trend is lower
We had mentioned in Tuesday’s closing report that Nifty may find a short-term support at 8,420 and that the indices were still weak. The major indices in the Indian stock markets have had a sharp fall of 1%-3% and the downtrend is threatening to continue. A second devaluation of the Chinese yuan today, a plunge in global commodity prices coupled with a depreciating rupee and stalled reforms process dampened sentiments in the Indian equity markets put a further dampner on stocks.
The negative global and local cues just ahead of the release of key economic data points unnerved investors, forcing the barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) to plunge 354 points in the day's trade.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed deep in the red. It ended 113 points or 1.33% down at 8,349.45 points.
The S&P BSE Sensex, which opened at 27,880.76 points, closed at 27,512.26 points, down 353.83 points or 1.27% from the previous day's close at 27,866.09 points.
The Sensex touched a high of 27,883.33 points and a low of 27,479.43 points in the intra-day trade.
Analysts observed that the domestic markets remained under pressure due to international cues even as commodity and banking stocks plunged. Profit bookings were widely witnessed in the mid and small cap counters.
Investors were also anxious over the Consumer Price Inflation (CPI) and Index of Industrial Production (IIP) data set to be released on Wednesday.
According to Devendra Nevgi, chief executive of ZyFin Advisors, with more parties giving in-principle agreement to GST (goods and services tax), the chances of the bill getting passed in this session remained alive.
"There is still hope that the government will be able to pass the GST bill. However it is going to be close as only one day remains for the session to end," Nevgi told IANS.
The monsoon session of parliament ends on Thursday, with the fate of key legislations like the GST and the land bill hanging in the balance.
Sector-wise, banking, automobile, capital goods, metals and oil and gas stocks came under heavy selling pressure. However, IT, technology, entertainment and media (TECK), consumer durables and healthcare index ended in the green.
The S&P BSE banking index plunged by 644.35 points, followed by automobile index which tanked by 494.05 points, capital goods index sank by 370.99 points, metal index receded by 361.63 points and oil and gas index declined by 334.12 points.
The S&P BSE IT index zoomed by 292.25 points, TECK index jumped by 107.74 points, consumer durables index rose by 93.95 points and healthcare index gained by 86.25 points.
The top gainers and losers in the major indices in the market are given in the table below:
Among the Asian markets, Japan's Nikkei was down 1.58%, Hong Kong's Hang Seng declined by 2.38%, China's Shanghai Composite Index fell by 1.03%.
In Europe, the London FTSE 100 index was down by 1.49%, Germany's DAX Index fell by 3.29%, and French CAC 40 fell by 3.37%.