Benchmarks crash like house of card in late hour of trade; Nifty ends below 7,400 level

Indian barometer gauges witnessed blood bath with both the major indices losing around one and a half percentage points and ending below their crucial 7,400 (Nifty) and 24,300 (Sensex) levels. After listless near their neutral lines for most part of the day’s trade, domestic gauges crashed like house of card in the last leg of trade, as uncertainty over the US Fed stance led to a global sell-off. Further, investors opted to remain on sidelines ahead of the announcement of key macro-economic data that includes December quarter gross domestic data (GDP), consumer inflation data (CPI) for the month of January.

Market participants failed to get any sense of relief with IMF chief Christine Lagarde’s statement that she hoped Indian Government would be able to implement a series of 'critically important' economic reforms including GST for unleashing the country's growth potential. Also, traders failed to draw any solace with Finance Minister Arun Jaitley’s statement that India continues to be one of the fastest growing economies in the world, but there is still potential to grow at a much faster pace. Finance Minister has further said that the Centre and states need to work together to put the country on a high growth path even as states pitched for higher allocation to meet additional outgo towards pay revision of their employees.

Selling got accelerated after European counters making a weak start with CAC, DAAX and FTSE were declining around two percent, extending the previous week's steep losses, with cyclical sectors losing ground on persistent concerns about the pace of global economic growth. Meanwhile in Asia, Singapore, Hong Kong and mainland China benchmark indices were shut on account of Lunar New Year holiday.

Back home, selling was both brutal and wide-based as none of sectoral indices, barring realty and consumer durables, on BSE were spared. Counters, which featured in the list of worst performers, include Software, technology and oil and gas. Sentiments remained dampened with report that foreign portfolio investors (FPIs) sold shares worth Rs. 606.83 crore on Friday, as per provisional data. Depreciation in Indian rupee too weighed down sentiments. The rupee depreciated 25 paise to 67.89 against the US dollar at the time of equity markets closing at the Interbank Foreign Exchange market due to appreciation of the American currency overseas.

Software space edged lower tracking the sharp decline in technology shares on the Nasdaq. Steel and banking counters, which gained momentum after the government set a minimum import price for steel products to check dumping from countries such as China and South Korea, too edged lower as investors booked profit in last leg of trade.

The NSE’s 50-share broadly followed index Nifty tumbled by over hundred points to end below the psychological 7,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around three hundred and thirty points to finish below its psychological 24,300 mark. Broader markets too struggled to get any traction and ended the session with marginal cut. The market breadth remained in favor of decliners, as there were 1,193 shares on the gaining side against 1,478 shares on the losing side while 130 shares remain unchanged.

Finally, the BSE Sensex declined by 329.55 points or 1.34% to 24287.42, while the CNX Nifty dropped by 101.85 points or 1.36% to 7387.25. 

The BSE Sensex touched a high and a low 24698.95 and 24196.84, respectively. The BSE Mid cap index ended down 0.23%, while Small cap index was down by 0.02%.

The only gaining sectoral indices on the BSE were Realty up by 0.37% and Consumer Durables up by 0.19%, while IT down by 1.95%, TECK down by 1.60%, Oil & Gas down by 1.48%, FMCG down by 1.25% and Auto down by 1.03% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.38%, SBI up by 2.29%, Bharti Airtel up by 2.25%, Lupin up by 0.97% and GAIL India up by 0.44%. On the flip side, Tata Motors down by 3.94%, ONGC down by 3.39%, ITC down by 2.90%, TCS down by 2.75% and Infosys down by 2.55% were the top losers.

Meanwhile, in a way to reduce its dependence on the US dollar following US lifting sanctions relief, Iran has asked Indian refiners to clear its past oil dues amounting to over $6 billion in euros within six months. Central Bank of Iran's vice governor Gholamali Kamyab has conveyed to Indian authorities that crude oil proceeds from now on would be in euro as Iran would not be able to undertake US dollar settlement through the US financial system.

The pending payments now total to over $6 billion which Iran has agreed to receive in installments over the next six months. Iran will be opening or re-activating euro accounts with Indian banks and would like to have the money transferred from refiners into these accounts. The Persian Gulf nation is talking to SBI for the purpose and has also opened an account with IDBI. Also, it wants settlement with India through the Asian Currency Union (ACU) and has written to the Reserve Bank of India (RBI) in this respect. Kamyab  further stated that National Iranian Oil Company (NIOC) would ask buyers of crude in India to open Letters of Credit (Lcs) in favour of Central Bank of Iran with SBI as was the case in past.

Since February 2013, Indian refiners like Essar Oil and MRPL have been paying 45 per cent of their import bill in rupees to UCO Bank account of Iranian Oil Company. The remaining has been accumulating, pending finalisation of a payment mechanism. With the lifting of sanctions, the payment channels will reopen and Iran is seeking the pending $6 billion in euros. The payments would be done in installments to prevent a run on the rupee with Mangalore Refinery and Petrochemicals (MRPL) likely to be asked to clear it’s outstanding of close to $3 billion first. Indian Oil Corp (IOC), which owes over $400 million to Iran, may be the second in the queue followed by smaller payments by HPCL-Mittal Energy (HMEL) and Hindustan Petroleum Corp. Essar Oil may be the last to clear its about $3 billion dues. Iran has not yet decided on utilisation of the $3 billion which has accumulated in the rupee account with UCO Bank.

The CNX Nifty touched a high and low 7512.55 and 7363.20 respectively. 

The top gainers on Nifty were Bank of Baroda up by 2.91%, SBI up by 2.35%, Axis Bank up by 2.25%, Bosch up by 1.90% and Bharti Airtel up by 1.24%. On the flip side, Tata Motors down by 4.03%, Indusind Bank down by 3.17%, Vedanta down by 2.98%, Kotak Mahindra Bank down by 2.73% and ITC down by 2.69% were the top losers.

European Markets were trading in green; Germany’s DAX tumbled 235.45 points or 2.54% to 9,050.78, UK’s FTSE 100 declined 111.93 points or 1.91% to 5,736.13 and France’s CAC was down by 110.16 points or 2.62% to 4,090.51.

Japanese stock exchange ended in green on Monday, snapping a four-day losing streak as the yen retreated against the dollar as dealers saw an increased chance of another US rate rise this year, after the January jobs report showed that hiring eased but the unemployment rate slipped to 4.9% and that wage growth increased modestly. Japanese market improved further after country posted an 18th consecutive current account surplus, boosted by a plunge in crude oil imports and a record travel surplus. Many regional markets across the region, including China, Hong Kong, Indonesia, South Korea, Malaysia, Singapore and Taiwan, remained closed for the Lunar New Year holidays.

Nikkei 225 gained 184.71 points or 1.1% to 17,004.30.