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406 pts knocked off BSE Sensex on FII fear,ITC,HDFC,RIL shares hit

NSE Nifty slumps 2.02 pct while BSE Sensex fell 1.8 pct on fear of withdrawal by FIIs.

Written by Reuters | Mumbai |
November 21, 2013 3:42:00 pm

BSE Sensex today plunged by 406.08 points,its biggest drop in over two months,on heavy selling triggered by fresh fears that US Fed would begin tapering its economic stimulus earlier than expected. All the 30 constituents of Sensex today closed lower.

Markets Top Gainers,Markets Top Losers

In step with local stocks,rupee plummeted to 62.97 versus the US dollar,raising the risk of higher import costs for the Indian economy.

Tracking overnight losses in US market,the Sensex opened the day lower at 20,579.26 and stayed in the negative terrain throughout. It touched a low of 20,189.23 intra-day,before finally closing at 20,229.05,down 406.08 points – its biggest loss since September 3 when it fell 651.53 points.

The Sensex had lost 256 points yesterday.

Sensex graphs November 21

ITC,HDFC and RIL dragged it down while Sesa-Sterlite,Jindal Steel,Tata Power and Bhel were the biggest laggards.

In the broader market,all 13 BSE sectoral indices closed in red. Banking,capital goods and realty were the worst hit.

On similar lines,the broad-based NSE Nifty fell below 6,000 level to end lower by 123.85 points,or 2.02 per cent,at 5,999.05.

Also,SX40 of MCX Stock Exchange fell by 237.62 points to end at 12,008.28.

Yesterday’s release of the minutes of Fed’s October meet spooked global markets as it signalled tapering of the USD 85 billion monthly bond buying could happen “in coming months” if the economy improves as anticipated.

A survey pointing to a weaker-than-expected pace of growth in Chinese manufacturing activity also hit Asian shares,raising doubts over the recent economic recovery.

Foreign funds bought Indian stocks worth Rs 80.4 crore yesterday,compared with over Rs 1,014.6 crore buying on Tuesday.

Dipen Shah,Head of Private Client Group Research,Kotak Securities:

Markets continued to fall for the second successive day,largely on Fed taper concerns. The fall was broad based with almost all stocks in the Nifty ending in the red. Weak PMI data in China also impacted sentiments. However,we do note that,the comments from the current Chairman of the Fed as well as the in-coming Chairperson have been relatively dovish as compared to those of the other lawmakers in the last Fed policy meeting.

Sensex graphs November 21

We reiterate that,introduction of more fiscal reforms and effective implementation of the reforms are the prerequisites for the markets to sustain their current valuations and improve upon them. While a potential liquidity withdrawal will impact developing markets,improved fundamentals may make foreign flows more sticky and lead to outperformance by India.

Alex Mathews,Head Research,Geojit BNP Paribas Financial Services:

Tracking the weak global cues the markets today remained in the negative zone. The global markets were trading lower as the Federal Reserve signaled that the central bank may reduce its stimulus in near future and of weak Chinese PMI data affected the sentiments. Emerging Asian market currencies were down along with the rupee which added fuel to the downside. The Nifty was trading near it major support level and in the second half it fell below the 6000 mark,and likely to test 5948.

Nifty closed at 5999 down around 123 points. The market breadth turned to negative as there were seen 944 stocks advancing against 1529 stocks declining.

The volatility index,India VIX stood at 21.14 up around 1.48%.

Today all the sectors ended in red and the major losers were Capital goods and Banking sector,which closed down around 2.29% and 2.20% respectively. In the stock’s front,the losers were ACC and Indusind bank,which closed down around 3.74% and 3.61% respectively. Mild buying was seen in Maruti and Cairn Indian,closed up around 0.34% and 0.30% respectively.

On Wednesday 20,November 2013 the FIIs were net buyers,bought shares worth Rs 80.4 crore as per the provisional data from the stock exchanges. On the other hand the DIIs were net sellers on 20 November 2013,sold shares worth Rs 283.81 crore as per the provisional data from the stock exchanges.

European markets were down as the HSBC Chinese manufacturing data missed the estimate and of the chances of withdrawal of bond buying program by the Federal Reserve.

Indian shares extend slump as foreign investor buying slows

(Reuters) NSE index fell more than 2 percent on Thursday,marking its biggest single-day percentage fall in nearly two months,as blue-chip shares slumped for a second straight day on fears the pace of foreign investor buying is slowing down.

Waning risk appetite from foreign investors is reviving concerns about India’s vulnerability when the Federal Reserve begins to taper its monetary stimulus given the country’s dependence on overseas flows to bridge its current account deficit.

A new reminder came on Wednesday after minutes from the Fed’s October meeting signalled a tapering could start soon,which along with China’s downbeat manufacturing data,hit other shares in the region. Foreign investors have pumped a net $6 billion into cash shares since late August,helping the benchmark BSE index hit a record high on Nov. 3.

“Volatility would only increase from here onwards as we head towards derivatives expiry amid weak global cues. We need at least 6 to 8 billion rupees of FII buying in the cash market everyday to sustain at these levels,” said Vivek Mahajan,head of research,Aditya Birla Money.

The broader NSE index closed down 2.02 percent,or 123.85 points,at 5,999.05,marking its biggest single-day fall since Sept. 23 and closing below the key 6,000 level.

The BSE index ended lower 1.97 percent,or 406.08 points,at 20,229.05,marking its lowest close in a week.

Foreign investors bought shares worth 800 million rupees ($12.8 million) on Wednesday,compared with nearly 10 billion rupees each on Monday and Tuesday. They sold stock futures worth 6.5 billion rupees over the previous two sessions.

Among index stocks with high foreign ownership,ITC Ltd fell 2.4 percent and Housing Development Finance Corporation Ltd dropped 3.2 percent.

Among other blue-chip companies,Reliance Industries Ltd fell 1.7 percent,Larsen & Toubro Ltd lost 2.9 percent and ICICI Bank Ltd ended down 1.8 percent.

Infosys Ltd fell 1.7 percent,adding to its 1.2 percent loss on Wednesday after hitting the highest level in nearly three years on Tuesday. However,among stocks that gained,Dabur India Ltd rose 2 percent as dealers cited attractive valuations after recent underperformance.

FACTORS TO WATCH

* Dollar at 4-month high vs yen on Fed minutes

* Brent slips below $108 on Fed taper worries,Iran hopes

* Asia stocks sag to 1-week low on China,Fed

* Foreign institutional investor flows

Sensex graphs November 21

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