As long as Nifty remains above 8,425, bulls have hopes of more gains
A sharp fall in July trade data, the rupee value, and poor monsoon rainfall and diminishing hopes of a rate cut disappointed investors, leading to the barometer index of the Indian equity markets closing 189 points down on Monday. The wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade 41.25 points or 0.48 percent down at 8,477.30 points.
The Sensex had rallied 518 points on August 14, on the back of expectations of further economic reforms and healthy macro-data.
Analysts cited the sharp fall in the exchanges as a reaction to July's trade data and profit-booking.
Exports during last month fell by 10.30 percent at $231.37 billion from $257.92 billion during July, last year. Exports during June stood at $222.89 billion.
Official data showed that the monsoon rainfall deficit widened from 6 to 10 percent for the August period.
Other worries such as a volatile rupee due to yuan devaluation and its impact on the RBI's rate decision further depressed sentiments.
The rupee ended Monday at Rs.65.33 to a US dollar touching a new two-year low. Rupee devalued around 5 percent as the People's Bank of China has let yuan fall by 4.6 percent since August 11.
This has been the biggest devaluation in the Chinese currency since 1994. The devaluation of yuan, intended to boost Chinese exports, has made investment in China cheaper.
The rupee had hit its lowest level in 24 months on August 13 at Rs.65.23 to a greenback. It had ended last week (August 14) at Rs.64.99 against a US dollar.
Sector-wise, healthy buying was observed in consumer durables, banks and metals stocks.
However, capital goods, automobile, oil and gas, healthcare and information technology (IT) sectors came under intense selling pressure.
The S&P BSE consumer durables rose by 122.24 points, bank index gained by 109.31 points and metal index rose by 101.82 points.
On the other hand, the S&P BSE capital goods index was down by 177.58 points, automobile index fell by 123.79 points, oil and gas index was down by 92.19 points, healthcare index declined by 58.24 points and IT index fell by 37.82 points.
Major Sensex gainers during Monday's trade were: Tata Steel, up 3.99 percent at Rs.246.55; State Bank of India (SBI), up 3.95 percent at Rs.279.05; GAIL, up 2.17 percent at Rs.345.50; Sun Pharma, up 0.83 percent at Rs.906.40; and Coal India, up 0.68 percent at Rs.380.
The major Sensex losers were: Cipla, down 4.95 percent at Rs.703.85; Hindalco Inds, down 2.63 percent at Rs.90.85; ONGC, down 2.37 percent at Rs.264.15; Hero MotoCorp, down 2.23 percent at Rs.2,653.50; and Dr.Reddy's Lab, down 1.99 percent at Rs.4,173.15.
Among the Asian markets, Japan's Nikkei was up 0.49 percent and China's Shanghai Composite Index rose by 0.73 percent. Hong Kong's Hang Seng, however, fell by 0.74 percent.
The top gainers and top losers of the major indices are given in the table below:
The closing values of major Asian indices in the stock market are given below:
All European indices were sharply down. The US indices have opened 0.75-.05% lower.