Nifty breaches 7800, Sensex plunges over 500 pts; SBI falls

Moneycontrol Bureau1:53 pm Market slips: The market slips further dragged by banks. The Nifty is down 172 points or 2 percent at 7799.30. The Sensex is down 514.91 points or 1.9 percent at 25768.18. About 508 shares have advanced, 1987 shares declined, and 94 shares are unchanged.Bnak Nifty is down 3.7 percent, Capital Goods , Metals slipped 3 percent, Auto Index falls 2.7 percent from previous close.

1:40 pm China's measures:  China's central bank plans to tighten rules on trading of currency forwards from October, sources with direct knowledge of the matter told agency, in a move to curb speculation and volatility after a shock devaluation of the currency last month.

The People's Bank of China (PBOC) has repeatedly intervened to stabilise the yuan since the August 11 devaluation - billed as free-market reform - sent shockwaves through global markets and depressed emerging currencies.

"The forwards move is yet another step to cushion unexpected strong expectations of yuan depreciation after the devaluation," said a senior trader at a major European bank in Shanghai. The sources said the PBOC will require banks trading currency forwards to set aside reserves from October 15.

1:30 pm Banks rating: Rating agency Fitch affirmed credit rating for nine Indian banks. The long-term Issuer Default Ratings (IDR), that is used to measure bank’s credit risk ability, on eight banks – SBI , IDBI , Punjab National Bank (PNB), ICICI , Bank of Baroda (BoB), BoB (New Zealand), Axis Bank , Canara Bank has been affirmed at “BBB-”. Only, Indian Bank has been affirmed at “BB+”. In an interview with CNBC-TV18, Saswata Guha, Director – Financial Institutions, Fitch Ratings (India) said that PNB is the weakest among the state banks because of its stressed assets situation. The agency downgraded PNB’s Viability Rating (VR) to ‘BB’ reflecting the risk to bank’s capital position on back of expanding stressed assets.1:20 pm Market check: Bears are rampaging Dalal Street once again. The Sensex plunged 428.61 points or 1.6 percent at 25854.48 and the Nifty is down 138.40 points or 1.7 percent at 7832.90. About 524 shares have advanced, 1945 shares declined, and 91 shares are unchanged.

Axis Bank, HDFC, Coal India, L&T and Hindalco are major laggards while TCS, Infosys, Sun Pharma, NTPC and ONGC.

Don't miss: Jet up 3% on ATF price cut by 11.6%, 2nd time in 2 monthThe market continues to feel the pinch as banks remain under heavy selling pressure. The Sensex is down 337.32 points or 1.3 percent at 25945.77, and the Nifty slips 110.70 points or 1.4 percent at 7860.60. About 576 shares have advanced, 1819 shares declined, and 100 shares are unchanged.

HDFC, Axis Bank, L&T, Hindalco and SBI are major laggards while Infosys, TCS, Sun Pharma, NTPC and ONGC are top gainers in the Sensex.

The rupee firmed up further by 24 paise to 66.24 against the US currency in late morning deals following sustained bouts of dollar selling by exporters and banks.

The rupee opened higher at 66.38 per dollar against yesterday's closing level of 66.48 at the Interbank Foreign Exchange (Forex) market. Globally, the US dollar was lower in early Asian trade as nervous investors look to upcoming data from China and the United States to gauge whether they need to further wind back carry trades, bets in risk assets funded by these currencies.