Post Session: Quick Review

Indian markets after a positive start succumbed to selling pressure induced by global weakness and suffered cut of over two percent on Tuesday. The volatility owing to the ensuing F&O series expiry on Thursday too played its part in dragging the markets lower for the day. In the early deals the markets rose to a one-month high amid speculation the Reserve Bank of India (RBI) will ease borrowing costs at its policy meeting next week. Finance minister Arun Jaitley too reiterated the government’s belief that India needs to reduce rates further to spur growth. While, Commerce and Industry Minister Nirmala Sitharaman’s statement that notwithstanding a financial crisis being experienced by major economies like China, India “stands out” as a “shining star” in the global economy sustaining a certain momentum despite challenges, too supported the markets in initial trade. However, the direction suddenly changed the course and the bulls gave up to the bears. 

On the global front, the Asian markets following the US trends ended mostly in the green, boosted by the Chinese market which rising for a third day surged by about a percent, after Chinese President Xi Jinping said the nation’s reforms won’t be derailed by signs of economic weakness, and that the government is stepping up efforts to transform its model for growth. The European markets made a mixed start and turned lower, as European Central Bank policy makers will speak this week amid speculation that the Fed’s inaction may spur Mario Draghi and his colleagues to boost asset purchases.

Back home, markets that had taken a cautious turn in the second half, suddenly went for a toss and suffered sharp slump, paring all their gains after the European markets made a soft start. Traders apart from the global growth concern also remained worried with the Asian Development Bank's (ADB) lowering growth projections for India for the current fiscal to 7.4 per cent, from the 7.8 per cent earlier, citing weak monsoon, poor external demand and inability of the government to push economic reforms in Parliament.  Sensex and Nifty slipped below their crucial psychological levels of 26000 and 7900 respectively led by selling pressure from banking, metal and capital goods stocks. Though, all the sectoral indices on the BSE ended in red, banking was the major drag along with metals, which lost ground on demand growth concern amid faltering economies around the globe. The oil and gas stocks too remained under pressure, though according to Oil Ministry data, natural gas production in August rose 3.7 per cent, the first increase in almost five years. Crude oil production also grew 5.6 per cent last month, the highest monthly growth since June 2011. Meanwhile, ONGC, Oil India and Cairn India have asked the Centre to cut the cess on crude oil they have to pay in view of the ongoing slump in prices. ONGC was down by 1.5%, Cairn was down by over a percent while, Oil India ended with a negative bias.  IT stocks that witnessed strong buying helping the upmove of market in early deals, too lost the direction and ended in red. The midcap and smallcap indices also gave up their early gains and ended in negative terrain.

The BSE Sensex ended at 25589.99, down by 602.99 points or 2.30% after trading in a range of 25587.40 and 26339.10. There were just 2 stocks in green against 28 stocks in red on the index. (Provisional)

The broader indices too giving up all their gains ended in red; the BSE Mid cap index lost by 1.68%, while Small cap index down by 1.29%. (Provisional)

The top losing sectoral indices on the BSE were Metal down by 4.34%, Bankex down by 3.32%, Power down by 3.12%, Capital Goods down by 3.12%, Realty down by 2.62%. (Provisional)

The two gainers on the Sensex were Wipro up by 0.20% and Mahindra & Mahindra up by 0.03%. On the flip side, Hindalco down by 6.60%, Vedanta down by 6.54%, Coal India down by 5.40%, Tata Motors down by 5.13% and NTPC down by 4.58% were the top losers. (Provisional)

Meanwhile, Union Minister of State for Power, Piyush Goyal at an event organized by the Confederation of Indian Industry (CII) in partnership with the American Council on a Renewable Energy (ACORE) has said that the US clean energy and financing companies must capitalise on the enormous opportunity in India’s clean energy market and has asked to come up with innovative ideas to address massive energy needs of the country. Addressing the concern and challenges faced by investors in India, Goyal laid out the government's vision for achieving the ambitious target of 175 GW of clean energy by 2022.

He said that India offers tremendous investment opportunities to American energy firms and has asked to help come up with innovative solutions so as not to miss out on the tremendous opportunity in India which is set to become the largest clean energy market in the next 10 years.

Goyal said that government was looking for a long term and sustainable solution to the problem which will be implemented soon and told investors at the event that a number of stalled projects are also being cleared. CII and ACORE have signed a Memorandum of Understanding (MoU) in order to bolster their partnership in the clean energy sector through facilitation of dialogues between industry experts, the development of platforms to deepen cooperation as well as platforms to exchange policy recommendations and best practices.

The CNX Nifty ended at 7789.80, down by 187.30 points or 2.35% after trading in a range of 7787.75 and 8021.60. There was just 1 stock on the gainers side against 49 stocks on the losers side on the index. (Provisional)

The lone gainer on Nifty was Wipro up by 0.30%, while Hindalco down by 6.66%, Vedanta down by 6.50%, Coal India down by 5.46%, Tata Motors down by 5.03% and Yes Bank down by 4.91% were the top losers. (Provisional)

European markets were trading with sharp cuts, Germany’s DAX declined by 252.07 points or 2.53% to 9,696.44; France’s CAC slumped by 127.59 points or 2.78% to 4,457.91, while UK’s FTSE 100 lost124.51 points or 2.04% to 5,984.20.

The Asian markets closed mostly in green on Tuesday, stabilizing from sharp declines in the previous session, as Wall Street ended higher overnight. Nikkei stock exchange was closed on account of National holiday. The Asian Development Bank stated that weaker growth in China this year is expected to cause a slowdown in the rest of Asia. The report comes as markets have been hit by extreme volatility driven by fears over the Chinese economy -- and its leaders’ management of it -- after last month’s surprise devaluation of its yuan currency. In an update to its flagship Asian Development Outlook released in March, the bank stated that growth in the region would hit 5.8% this year and 6.0% in 2016. However, it tipped China -- the main driver of global economic growth -- to expand 6.8% this year, instead of the 7.2% previously estimated, following a stream of weak indicators including on trade, inflation, investment and consumer spending. Bank Indonesia Governor Agus Martowardojo stated that the country’s foreign exchange reserves have fallen to $103 billion. At the end of August, Indonesia’s foreign reserves totaled $105.35 billion, down from $107.55 billion at the end of July. The central bank is due to announce September’s final figure on October 7.