Bloodbath continues on Dalal Street in late morning deals

Indian equity benchmarks were continued to witness massacre in late morning deals on report that Prime Minister Narendra Modi on Tuesday announced that 500 and 1,000 rupee banknotes would be withdrawn from circulation at midnight to crack down on rampant corruption and counterfeit currency. Traders failed to get any sense of relief with the report that a new and simpler portal for the incoming Goods and Services Tax regime went live on Tuesday that will enable easy filing of returns and tax payments through credit/debit cards and other modes. Weakness in regional counterparts’ too dampened sentiments, as every new exit poll in the U.S. presidential election showed the race to be a nail-biter, sending investors stampeding to safe-haven assets.

Back home, shares of real estate were remained under severe pressure, falling by up to 20% on the bourses after Prime Minister Narendra Modi on Tuesday announced that Rs 500 and Rs 1,000 currency notes would no longer be printed, as part of his government's fight against black money. In the scrip specific developments, Bharat Forge tumbled on reporting 26.34% fall in its net profit at Rs 126.89 crore for the quarter ended September 30, 2016 as compared to Rs 172.27 crore for the same quarter in the previous year. However, VA Tech Wabag trades higher on reporting 17.66% rise in its net profit at Rs 28.38 crore for the quarter ended September 30, 2016, as compared to Rs 24.12 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 26635.54, down by 955.60 points or 3.46% after trading in a range of 25902.45 and 27026.28. All the 30 stocks on the Sensex were declining.

The broader indices were trading in red; the BSE Mid cap index crumbled 5.24%, while Small cap index was down by 6.26%.

The losing sectoral indices on the BSE were Realty down by 14.13%, Consumer Durables down by 7.15%, Metal down by 4.68%, Auto down by 4.30%, FMCG down by 4.08%, while there were no gainers on the BSE sectoral front.

The top losers on the Sensex were Adani Ports &Special down by 6.69%, Hero MotoCorp down by 5.99%, ICICI Bank down by 5.90%, TCS down by 5.46% and HDFC down by 4.96%, while there were no gainers on the index.

Meanwhile, in order to curb corruption, make efforts to recover ‘black’ or unaccounted money and use it for schemes for the welfare of the poor, Prime Minister (PM) Narendra Modi has declared that from midnight of November 8, 2016, currency notes of Rs 1000 and Rs 500 denomination will not be legal tender. People can deposit notes of Rs 1000 and Rs 500 in their banks from November 10 till December 30, 2016. However, he said that all notes in lower denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid.

After the government’s surprise decision the monetary authority posted a 25-point detailed FAQs (frequently asked questions) explaining the rationale behind the move. The Reserve Bank of India (RBI) has said that the most important reason for the ban was the abnormal rise in fake currencies of higher denomination and also the higher incidence of black money in the system, but it assured the public that a person who changed higher value cash will get exactly the equal amount in lower denominations up to Rs 4,000 in cash irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account as the scheme of withdrawal of old high denomination notes does not provide for it.

Explaining the importance of the scheme, the RBI said that the legal tender character of the notes in denominations of Rs 500 and Rs 1,000 stands withdrawn. In consequence, the withdrawn old high denomination notes cannot be used for transacting business and/or store of value for future usage. The scheme will close on December 30, 2016 until then one can exchange the banned notes at the branches of commercial banks, regional rural banks, urban cooperative banks, state cooperative banks and special RBI counters. And those who failed to do will be offered a limited opportunity at specified offices of the RBI, along with necessary documentation as may be specified by the central bank.

The CNX Nifty is currently trading at 8229.60, down by 313.95 points or 3.67% after trading in a range of 8002.25 and 8351.15. All the 51 stocks are declining on the index.

The top losers on Nifty were Ultratech Cement down by 7.02%, Adani Ports &Special down by 6.49%, BHEL down by 6.46%, Hero MotoCorp down by 6.36% and Ambuja Cement down by 6.32%, while there were no gainers on the index.

All the Asian markets were trading in red; Nikkei 225 crumbled 912.29 points or 5.31% to 16,259.09, Hang Seng decreased 645.02 points or 2.82% to 22,264.45, Taiwan Weighted tumbled 276.79 points or 3% to 8,940.64, Jakarta Composite shed 112.49 points or 2.06% to 5,358.20, KOSPI Index fell 57.36 points or 2.86% to 1,946.02, FTSE Bursa Malaysia KLCI dropped 15.48 points or 0.93% to 1,648.34 and Shanghai Composite was down by 13.94 points or 0.44% to 3,133.94.