Sensex falls over 200 pts; rupee hits fresh low at 61.59/$

Moneycontrol Bureau
Live Market Commentary

12:00 pm: Expert take on NSEL mess: G Chandrashekar, Commodity Editor, Business Line feels that the  government took long to notice illegal trades on the National Spot Exchange (NSEL).

On July 31, the NSEL suspended trade in all contracts except 'e-series' following the government's direction not to launch new contracts because of violation of some rules.

There is a suspicion that NSEL may have lower than Rs 6,000 crore stock in its warehouse, Chandrashekar told CNBC-TV18 in an interview. He urges the government to institute an independent agency to verify the stocks.

"If stocks as per books are available physically in the warehouses that will improve the confidence levels of market participants and that is a very critical issue," he added.

11:50 am Alert: Rupee hits fresh low at 61.59 per dollar.

11:50 Big deal! Siemens wins order worth Rs 184 crore for Gurgaon metro project. The stock is up 3 percent on the BSE.

11:45 am Earnings: Mumbai-based transformer and switchgear products manufacturer Crompton Greaves' first quarter (April-June) consolidated net profit dropped higher-than-expected 30 percent year-on-year to Rs 60 crore on lower profits in power segment.

Consolidated net sales rose 12.3 percent on yearly basis to Rs 3,157 crore during the quarter, which was above analysts' forecast.

Meanwhile, its consumer products and industrial systems divisions performed well during the quarter gone by. EBIT of consumer products rose to Rs 93.98 crore from Rs 85.03 crore and industrial systems' EBIT increased from Rs 36.47 crore to Rs 38.57 crore.

Other income jumped 90 percent Y-o-Y to Rs 35.32 crore while finance cost climbed to Rs 20.14 crore from Rs 9.89 crore during the same period. The stock recovered from the day's low and is up 2 percent on the BSE.

11:40 am Opinion: Service sector, which contributes 60 percent to Indian economy has turned sluggish, which indicates that growth environment has deteriorated significantly, says Nilesh Shah, MD & CEO, Envision Capital.

“It was more like the last nail in the coffin in the sense the services sector was so far was growing at above GDP,,” he told CNBC-TV18 in an interview. The HSBC Services Purchasing Managers' Index (PMI) contracted for the first time in 20 months to 47.9 points in July from 51.7 points in the previous month. CNBC-TV18’s managing editor Udayan Mukherjee also feels that poor service sector growth data is an alarming bell and could lead to GDP downgrade going ahead.

11:30 am: Rupee outlook: Underlying US dollar demand from importers will take the already weak Indian rupee towards 61.70-61.80 levels, predicts Arvind Narayanan, Head of Sales, Treasury & Markets, DBS. Rupee breached previous low of 61.21/USD in early trade on Tuesday.

The Reserve Bank of India (RBI) which recently announced a slew of liquidity measures to protect the rupee may at last resort to hiking rates if rupee hits the 62 mark, he added.

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Rupee is playing havoc in the market dragging the benchmark indices. The Sensex is still below 19,000 and is at 18983.95, down 198.31 points and the Nifty slips 70.45 points to 5614.95.

About 496 shares have advanced, 1254 shares declined, and 123 shares are unchanged.

Housing Development and Infrastructure (HDIL) shares plunged nearly 15 percent in morning trade to touch a record low of Rs 26.10 Tuesday on interest payment default.

Indiabulls Financial Services (New name - Indiabulls Housing Finance after merger) has alleged that the promoters of HDIL, Rakesh and Sarang Wadhawan have defaulted on their interest payments, reports CNBC-TV18.

Asian markets are weak on speculation that the Fed will soon be able to reduce economic stimulus, Nikkei is down over a 1 percent for the second day in a row, Hang Seng has lost over a 1.5 percent.

In currencies, dollar index at 81.8, euro at 1.326 and yen now sub 98 at 97.96. In commodities, Brent holds above USD 108, Nymex above USD 106. Gold slips below USD 1300.