Sensex, Nifty slip 2%; bank, metals, oil, auto bleed

Moneycontrol Bureau11:55 am Brokerage view: Credit Suisse has initiated coverage on Arvind with an outperform rating and a target price of Rs 360 apiee. It believes improving margins in brands and retail (B&R), faster growth in relatively low capital-intensive businesses, and improvement in working capital should gradually help free cash flows.

The brokerage expects revenue/EPS CAGR of 15 percent/27 percent over FY16-18 (management expectations are higher).

After June quarter earnings, Arvind had said for the full year, revenue growth was likely to be 14-15 percent with improvements in margin in brands & retail segment.

11:50 am OROP finally: It seems the Centre has decided to announce the implementation of One Rank One Pension for defence veterans and widows of soldiers within the next 48 hours.

According to the OROP draft accessed by CNN-IBN, the date of effectiveness of the scheme will be July 1, 2014 and the base year will be 2013. The veterans had been demanding that the scheme be implemented from April 1, 2014.

But the biggest sticking point is the time duration for equalisation of pension. While the government draft says equalisation of pension will take place every five years but defence veterans have made it clear that it should happen every year and if that is not possible then at least once in two years.11:43 am Market check: The Sensex is down 503.51 points or 1.9 percent at 25261.27 and the Nifty slips 159.65 points or 2 percent at 7663.35. About 335 shares have advanced, 1902 shares declined, and 65 shares are unchanged. Tata Motors, Tata Steel, Vedanta, Axis Bank and ICICI Bank. 11:35 am Royal Dutch Shell is in talks to lease India's new strategic oil caverns at Mangalore on the country's southwest coast, two sources said, giving it increased storage in a market where oil demand is increasing.

A decision on the Mangalore site, which has total capacity of around 11 million barrels of oil, depends on Shell winning relief from local sales tax, the sources said, while commissioning has been pushed back by two months to December.

India, the world's No.4 crude consumer and one of the few major economies which is still seeing strong demand growth, is building up strategic petroleum reserves (SPR) facilities at three locations in the country's south that will hold a total 36.87 million barrels of oil, enough to cover almost two weeks of its needs.11:30 am Market outlook: Investor concerns in the US stock market of a "crash-landing scenario" for the Chinese economy are misplaced, former Morgan Stanley Asia Chairman Stephen Roach said. "I think those fears are vastly overblown," he said.

Growth in China has slowed, Roach acknowledged in a CNBC "Squawk Box" interview, "but it's not going in for a crash … and that will present, I think, an opportunity for shares to re-evaluate the China threat, big time." The influential Yale economist did fault the Chinese for poorly handling the turmoil in its financial markets. "They did not do a great job of handling the equity market bubble on the upside by encouraging it and fighting it on the downside," Roach said.

11:22 am Market check: The market sees a bit of recovery. The Sensex is down 429.33 points or 1.7 percent at 25335.45 and the Nifty slips 136.60 points or 1.7 percent at 7686.40. About 323 shares have advanced, 1855 shares declined, and 71 shares are unchanged.

11:15 am Base rate computation: The Reserve Bank is mulling changing the way base rates are computed by banks. The RBI issued draft guidelines on the computation of the same, based on marginal costs of funds, which may be effective from April 1, 2016. At the moment, banks pick any kind of cost of funds as a reference.RBI suggested the move in its first bi-monthly policy on April 7 in a bid to ensure that banks pass on policy transmission effectively. RBI has lowered repo rates by 75 basis points since January this year. But, banks are yet to lower their base rates by as much.

However, if implemented in its current form (draft guidelines), it may have a significant impact on profits of banks because return on assets (RoA) will fall by 20 basis points in fiscal year 2017, says Pawan Agrawal, chief analytical officer at Crisil Ratings.11:10 am Is it time to panic again? "This too shall pass," is how Ramesh Damani, Member, BSE chooses to describe the current distress. Indian equities have three key factors to watch for, namely, US Fed meet, China and RBI. The market will start rebounding once Fed meet is out of the way, a confident Damani told CNBC-TV18. Another market guru who is not ready to believe in the doom story is Madhu Kela, Chief Investment Strategist at Reliance Capital. Of course he knows that a fall of this magnitude in a very short time unnerves even a very sophisticated investor, let alone retail investors, yet he urged retail investors not to miss the bus. One must remember India story is well discovered and a correction of this scale is extremely beneficial for long-term investors, he said.Don't miss: Raghuram Rajan completes 2 years as RBI chief: How he fared

Continous heavy selling keep the market wobbly on Friday. The Sensex is down 516.71 points or 2 percent at 25248.07 and the Nifty is down 163.60 points or 2 percent at 7659.40. About 293 shares have advanced, 1809 shares declined, and 56 shares are unchanged.

Cipla and Lupin are only the two Sensex gainers. Tata Steel, Tata Motors, Vedanta, Hindalco and ICICI Bank are major laggards in the Sensex.

Oil prices edged lower in cautious Asian trade today as investors await the release of a US jobs report for August that could determine the Federal Reserve's timetable for hiking interest rates. A rate hike would likely strengthen the greenback, making dollar-priced oil more expensive to holders of weaker currencies, hurting demand and prices. However, Ang said crude retained some support after the European Central Bank (ECB) on Thursday indicated more stimulus could be on its way for the eurozone.