Sensex down 286 pts at close; PSU banks hurt, SBI dips 4.6%
The Sensex shed 400 points in two days after rising more than 1000 points in previous three sessions. This volatility will be negative for the markets, says Tirthankar Patnaik of Religare Capital Markets.
July 03, 2013 / 18:53 IST
Moneycontrol Bureau
It was a second weak session for the equity benchmarks after rising sharply in previous three days, weighed down by disappointing China data, Portugal political worries, rise in crude oil prices and rupee depreciation.The BSE Sensex fell 286.06 points or 1.47 percent to close at 19177.76 after hitting an intraday low of 19147.31. The NSE Nifty lost 86.65 points or 1.48 percent to finish at 5770.90. The Sensex shed 400 points in two days after rising more than 1000 points in previous three sessions. This volatility will be negative for the market, says Tirthankar Patnaik of Religare Capital Markets."We expect the markets to remain in a range bound level from 5,600 to about 6,000 with a lower bias" he adds.The BSE Midcap Index was down 1.7 percent and Smallcap fell 1.44 percent as two shares declined for every share rising on the BSE.Indian rupee too depreciated for the second consecutive session, moving back to 60 mark again. The currency fell by 55 paise to 60.21 per dollar today.Dominic Bunning of HSBC believes the Indian currency is still in the clutch of the global environment and the move today is very much in line with what has been seen in the rest of Asia.Also Read - Like EM defensives; see more pain for Asian currencies: MacquarieForeign institutional investors have sold Rs 705.06 crore worth of equity shares while domestic institutional investors bought Rs 252.88 crore, as per provisional data available on the NSE. India HSBC composite purchasing managers index (PMI) declined to 50.9 in June from 52.0 in previous month and HSBC services PMI slipped to 51.7 from 53.6 during the same period.PSU banks hit quite badly as the same finance minister P Chidambaram after failing to convince the Reserve Bank of India to cut rates, then ordered the 5 big PSU banks to do so in January 2008. Now in 2013, with the RBI refusing to oblige, the FM today told the PSU banks yet again to cut rates, and some have already obliged.Bank of India said it would reduce base rate by 25 basis points to 10 percent effective July 8.Country’s largest lender State Bank of India crashed 4.6 percent followed Bank of Baroda, Bank of India, Oriental Bank of Commerce, Punjab National Bank and UCO Bank with 5-8 percent losses while top private sector lenders ICICI Bank and HDFC Bank declined 1-1.5 percent.Realty was the worst hit sector as the Realty Index fell 4.76 percent while Metal, Capital Goods, Power and Oil & Gas indices were down between 2.5-3 percent.Index heavyweight Reliance Industries dropped 2.4 percent, and HDFC, Larsen & Toubro and Bharti Airtel declined nearly 3 percent.However, Sun Pharma and Jindal Steel shares outperformed with 1 percent gains followed by ITC with 0.4 percent gains.Globally, Asian markets closed lower after disappointing data from China. The headline services PMI published by the National Bureau of Statistics slipped to a 9-month low of 53.9 in June from May's 54.3, and the reading from a Markit/HSBC survey improved a touch to 51.3 from 51.2 in May.European markets dropped nearly 2 percent (at the time of closing of Indian equities) on rising political tension in Portugal.Brent crude oil August futures gained one percent to USD 104.92 per barrel while Nymex crude oil futures jumped 1.8 percent to USD 101.42 a barrel on political unrest in the Middle East. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
