Mkt ends at 8-mth low: Sensex sheds 469pts, Nifty cracks 2%

Moneycontrol Bureau

03:30 pm Market close: It is another dismal day at Dalal Street. The Sensex shed 469.52 points or 1.7 percent at 26370.98 and the Nifty plunged 159.10 points or 1.9 percent at 7965.35. Both the indices ended at 8-month lowest closing level. About 792 shares advanced, 1852 shares declined, and 152 shares were unchanged.

Tata Power, Tata Motors, Axis Bank, Cipla and Reliance were big losers in the Sensex.

03:10 Growth outlook: India's GDP growth is likely to revive to 7.9 percent in the current financial year and then further up to 8.1 percent in 2016-17, driven by structural reforms and cyclical easing of the monetary policy, says a Citigroup report.

According to the global financial services major, investment and consumption uptick is likely to result in a growth pick-up from 7.3 percent in 2014-15.

"Going forward, given the ongoing trends of structural reforms, coupled with cyclical easing of the monetary policy by further 25 basis points in the current fiscal and range-bound commodity prices, India's growth is likely to revive to 7.9 percent in 2015-16 and towards 8.1 percent in 2016-17," Citigroup said in a research note.

The report, however, cautioned that the recent spell of unseasonal rains - impacting around 10 percent of standing winter crops - and the forecast of a "deficient" monsoon pose a challenge to the ongoing improvement in growth inflation dynamics.

02:55pm F&O buzz: The Nifty 8000 Put's premium increased by 75 percent to Rs 115 with addition of 2 lakh shares in open interest that jumped 4 percent.. Nifty 7900 Put premium rose by 83 percent to Rs 74 and it added 6 lakh shares in open interest that went up 15 percent.

Nifty 7800 Put's premium jumped 90 percent to Rs 45 with addition of 4.6 lakh shares in open interest that increased 9 percent.

02:50pm Rupee update: The sudden rupee weakness indicated that foreign investors or global traders may be offloading their portfolios for profit taking. The fell 13 paise to 63.97 a dollar in afternoon trade after seeing flat-to-higher trade from early trade.

02:40pm Market Update: The Sensex tanked 414.07 points or 1.54 percent to 26426.43, and the Nifty fell 137.65 points or 1.69 percent to 7986.80. Bank Nifty cracked 2 percent.

About 741 shares have advanced, 1774 shares declined, and 163 shares are unchanged on the BSE.

02:30pm Interview: Auto component manufacturing company Motherson Sumi, at its meeting held on June 10, 2015, recommended the issue of bonus shares in the ratio of one bonus share against two existing shares (1:2) subject to the approval of the shareholders.

Speaking to CNBC-TV18, chairman Vivek Chaand Sehgal said the company is capable of achieving its revenue target of  USD 18 billion by 2020. Sehgal said the company intends to push 2-3 plants onstream in FY16. The company has recently won orders worth euro 4.4 billion.

02:15pm PSU banks need fund: A planned USD 1.2 billion capital infusion by the government into state-run lenders during the fiscal year to March 2016 will not be enough, Reserve Bank of India (RBI) Deputy Governor SS Mundra said today.

Mundra said the RBI was in talks with the India's Finance Ministry over the bank capitalisation issue, but did not mention how much infusion would be required.

"We've been taking it up with the finance ministry. This is the time when many of the banks are in need of higher capital," he said.

The government had budgeted a smaller-than-expected infusion of Rs 7,940 crore (USD 1.24 billion) to shore up the capital of the state-run banks at the federal budget unveiled in February.

02:00pm Market Check

The selling pressure intensified in afternoon trade as the Nifty breached 8000-mark intraday, impacted by further selling pressure in heavyweights like Reliance Industries, Tata Motors and ICICI Bank. However, the broader markets outperformed benchmarks, falling 0.6 percent.

The Sensex fell 327.32 points or 1.22 percent to 26513.18 and the Nifty dropped 109.20 points or 1.34 percent to 8015.25. About 762 shares have advanced, 1722 shares declined, and 162 shares are unchanged on the BSE.

Adrian Mowat of JP Morgan said India looks weak on technical parameters. According to him, 10-12 percent correction is routine in emerging markets. Despite weakness, however, India remains one of the fastest growing emerging market economies, he believes, adding he will be a buyer in case markets show signs of further weakness.

Reliance Industries extended losses, falling 3 percent. Tata Motors topped the selling list on Sensex, down 3.6 percent after CLSA has reduced target price on the stock to Rs 600 from Rs 650 per share but reiterated a buy rating with a view that current weakness is an opportunity to enter. It has also cut FY17-18 earnings per share (EPS) by 11 percent factoring in lower China volume growth and a 50 percent contraction in JLR’s China margin premium over other regions.

Shares of ICICI Bank, HDFC, Infosys, HDFC Bank, Larsen & Toubro, SBI, ITC, BHEL, Axis Bank and NTPC declined 1-3 percent while Vedanta outperformed, up 2.5 percent ahead of likely meeting for considering of merger of Cairn with itself on June 14. HUL was up 0.9 percent and Sun Pharma gained 0.4 percent.