Nifty in bear grip, Sensex sinks 1000 pts; ONGC drops 6.5%

Moneycontrol Bureau11:55 am IOC in News: Government's 10 percent stake sale in IOC kicked off today with some demand coming in from retail investors in initial trade amid hefty sell-off in broader market.The government is looking to raise about Rs 9,302 crore from sale of 24.28 crore shares in IOC through a one-day OFS route at a floor or minimum price of Rs 387 a piece. 

IOC scrip slipped below the floor price of Rs 387 a share for the OFS and were trading at Rs 379.75, down Rs 14.70 or 3.73 percent over previous close on BSE. The fall in IOC scrip is in line with the broader market trend which witnessed a sharp decline soon after opening.11:40 am Buzzing: Shares of Glenmark Pharma plunged more than 6 percent after brokerage Bank of America Merrill Lynch (BoAML) downgraded the stock to underperform with revised target price of Rs 1,200 apiece.

The stock rallied 56 percent in the last six months. The brokerage believes Glenmark is fully valued at its target September 2017 P/E of 21x.

Yet, BoAML valued stock at a 10 percent discount to large peers, given its relative business size compared to large peers, lower return profile and leveraged balance sheet against peers.

It believes the FY17 expected price-to-earnings at a 25 percent premium to its one-year average priced in strong growth momentum in the US as well as India, margin expansion in the core business, and potential improvement in the balance sheet. It expects company's core profit after tax to double over FY15-18, driven by 19 percent sales CAGR and 300 basis points margin expansion over the same period.11:20 am Experts overweight on India: Although global markets saw a major correction today, followed by further correction in the Asian markets, Michael Kurtz Chief Asia Equity Strategist, Nomura is not overly worried of US growth going forward. According to him, US is still looking good with strong home and auto sales data and does not think there is a strong case for a deep correction in US equity markets. Within the Asian region ex-japan, he is worried about the Chinese growth but is optimistic on India.India, he says is the top pick for the house and largest overweight. Moreover, falling commodity prices and oil is aiding India and keeping us more positive on it, says Kurtz.Also read - 7800-8000 bottom to throw sharp relief rallies: Phillip Cap11:00 am Market Check

Equity benchmarks as well as broader markets continued to get hammered due to bloodbath across the globe, tracking likely slowdown in Chinese economy. The 30-share BSE Sensex slipped 995.44 points or 3.64 percent to 26370.63 and the 50-share NSE Nifty declined 309.45 points or 3.73 percent to 7990.50.

The BSE Midcap and Smallcap indices cracked over 5 percent. More than 10 shares declined for every share advancing on the Bombay Stock Exchange.

All sectoral indices were in the red. Bank Nifty plummeted almost 5.5 percent as stocks like Axis Bank, Yes Bank and ICICI Bank saw cuts of around 5-7 percent each.

The rupee slumped to a fresh 2-year low, below the 66 mark as Asian markets reeled under fears of a China-led global economic slowdown.

The China rout accelerated, leading Asia sell-off. Markets touched multi-year lows. Shanghai index fell over 8 percent even as authorities allowed pension funds managed by local governments to invest in the stock market for the first time. In commodities, crude prices hit fresh 6-year lows.

However, big brokerages remained bullish on India. Geoff Dennis of UBS remained overweight on India within their emerging market portfolio.

Viktor Shvets of Macquarie believes India is relatively better positioned compared to other Asian peers. Edward Morse of Citi Research expects Indian GDP growth to outstrip Chinese & global growth. And James Glassman of JP Morgan Chase says India's outlook is very promising.

ONGC and BHEL topped the selling list on Sensex, down 6.5 percent each.