The rupee collapsed to a fresh low of 73.82 intraday against the US dollar amid rising global oil prices, deepening concerns about the current account deficit and capital outflows. The currency fell 24 paise to close at 73.58 a dollar today and depreciated 15.5 percent year-to-date, effectively becoming the worst performing Asian currency.
More than Rs 3.3 lakh crore of investors' wealth eroded in a single day.
Gainers and Losers
HPCL, BPCL and IOC were biggest losers among Nifty50 stocks, falling more than 11 percent after Finance Minister Arun Jaitley said the government cut excise duty on petrol & diesel by Rs 1.50 per litre. "Oil marketing companies will absorb Re 1 per litre w.r.t petrol & diesel prices."
Reliance Industries (6.87 percent) and Eicher Motors (5.71 percent) were other losers while ICICI Bank bucked the trend, rising 4.21 percent followed by Axis Bank (up 2.45 percent), UltraTechCement (2.16 percent), Bharti Infratel (1.77 percent) and Yes Bank (up 1.06 percent).
Market Closing Update
Benchmark indices closed sharply lower on Wednesday with the Sensex losing 806.47 points or 2.24 percent to 35,169.16 as all sectoral indices ended in the red.
The 50-share NSE Nifty plunged 259 points or 2.39 percent to 10,599.30. More than two shares declined for every share rising on the BSE.
JLR UK Sales for September
Tata Motors' subsidiary Jaguar Land Rover sold 19,874 units in UK in September, down 2.6 percent compared to 20,403 units sold in same month last year.
Jaguar sales increased 2.1 percent year-on-year to 7,047 units while Land Rover sales slipped 3.8 percent to 12,827 units in month gone by.
OMCs decline on excise cut: Shares of Oil marketing companies slipped up to 11 percent after government cut excise on petrol and diesel by Rs 1.50, while OMC will absorb Re 1 cut.
Finance Minister Arun Jaitley:
Government cuts excise duty on petrol and diesel by Rs 1.50 per litre and OMC will cut excise by Re 1 per litre.
Expect market to become attractive with every correction, says BNP Paribas
In the last nine months, the market was divergent, where domestic consumption oriented stocks were doing very well, while midcaps, small caps and some largecap names were correcting significantly, according to Anand Shah.
Reliance Comm Vs Ericsson case update: Reliance Communication told Supreme Court (SC) that it will secure the necessary approvals from DoT in 10 days. SC to hear Ericsson's contempt plea against Rel Comm on October 9, reported CNBC-TV18.
Aviation stocks trade higher: Share price of aviation companies were trading higher by 5-12 percent on Thursday.
Interglobe Aviation was quoting at Rs 824.90, up 6.08 percent, Jet Airways was quoting at Rs 198.25, up 11.69 percent and SpiceJet was quoting at Rs 68.95, up 9.97 percent on the BSE.
Benchmark indices recovered a bit from day's low with the Sensex trading down 642.37 points or 1.79 percent at 35,333.26.
The 50-share NSE Nifty declined 202.00 points or 1.86 percent to 10,656.30.
The Indian rupee also recovered from its day's low to trade at 73.59 against the US dollar, down 25 paise from previous close of 73.34 a dollar. The currency hit record low of 73.82 on consistent dollar demand.
Market Cap Erosion
In the today's market correction, more than Rs 2.5 lakh crore worth of investors' wealth eroded.
The Market Capitalisation of BSE companies declined to Rs 1,41,02,145.98 crore on October 4 from Rs 1,43,71,351.05 crore on October 3, at 14:50 hours IST.
“Whenever liquidity is tight, interest rates are heading up it is bound to have some negative effect on the asset class. As a consequence of that, earnings do get downgraded eventually,” Anup Maheshwari, joint CEO & CIO at IIFL Asset Management Company told CNBC-TV18
"However, these kind of corrections are good in terms of longer term profile of asset class and an opportunity for investors. One will have to make some changes in portfolios," he added.
Talking about expectations from the monetary policy tomorrow, Maheshwari said, "Consensus belief is for 25 basis points hike and market is not likely to take too much cue from the rate hike because it is clear where it is headed directionally. So 25 or 50 basis points will not make much of difference."
It’s impossible for @RBI to simultaneously be monetary policy dovish (to lend support to the Banks, NBFCs & MFs to tide over current financial crisis) & sound hawkish (for management of CPI at 4-5% comfort zone against external headwinds); eager2see how MPC does this balancing?— Moses Harding (@mosesharding) October 3, 2018
BSE, NSE To Suspend Trading In Moser Baer From Oct 11Leading stock exchanges BSE and NSE have decided to suspend trading in the equity shares of Moser Baer India, a manufacturer of CDs and DVDs, from October 11 following the commencement of liquidation proceedings. The move comes after Delhi Bench of National Company Law Tribunal (NCLT) through an order on September 20 had initiated liquidation process against Moser Bear. It had also appointed Resolution Professional Anil Kohli as the liquidator. "To avoid market complications, trading in the equity shares of Moser Bear India will be suspended with effect from Thursday, October 11, 2018," BSE said in circular. In a separate circular, National Stock Exchange (NSE) also announced the similar move. Source: PTI
The Sensex & Nifty has fallen sharply on the back of selling witnessed across all Asian markets.
"Since most Asian markets are importers of crude the impact of rising crude prices and rising Dollar Index will weigh on their Trade Balance. Amongst Asian markets India is the highest importer of crude after China hence the impact on India’s Trade Deficit is very high," Rusmik Oza, Senior VP (Head of Fundamental Research) of Kotak Securities said.
FPIs are selling in emerging markets which is visible in India also. Nifty has broken the 200 DMA placed at 10,777, which has intensified the selling from market participants. Also, heavy weights like Reliance and few more stocks that had led the last 1,200 points rally in Nifty from 10,500 to 11,700 are the ones that are correction sharply hence the impact is higher in today’s fall.
"If Nifty sustain below the 200 DMA for more than a week then the floor can shift to 10,000 on the downside," he said.
Rupee Hits Record Low Despite Suspected Intervention
The rupee plumbed record lows as global oil prices rose and stocks and bonds weakened, heightening speculation that the Reserve Bank of India (RBI) may hike interest rates on Friday more aggressively than earlier expected.
A majority of analysts polled by Reuters last week expected a third consecutive 25 basis point increase in the key repo rate, currently set at 6.50 percent, though speculation has mounted in recent days that the RBI could opt for a 50 bps hike.
"Expectations are building for an aggressive rate response, but the policy committee's inflation mandate and the current benign trend, backs the case for a measured 25 bps rate hike," Radhika Rao, an economist at DBS wrote in a note on Thursday. Source: Reuters.
Sensex tanks about 800 pts; 4 factors weighing on market, rupee
In the forthcoming sessions, if Nifty doesn't stabilise around its 200-days EMA of 10,785 levels, traders should prepare themselves to see the index heading towards 10,557 levels, said Mazhar Mohammad of Chartviewindia.in.
ICICI Bank up 5% as Chanda Kochhar Quits
The bank said Board of Directors accepted the request of Chanda Kochhar (MD and CEO) to seek early retirement from the Bank at the earliest.
The bank further said the enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome of the enquiry.
Kochhar will also relinquish office from the board of directors of the bank's subsidiaries.
The board decided to appoint Sandeep Bakhshi as Managing Director & Chief Executive Officer. His appointment will be for a period of five years until October 3, 2023, subject to regulatory and other approvals.
Separately, due to health reasons MD Mallya, Independent Director, resigned from the board and the same was accepted, ICICI Bank said.
Mercator Record Coal Production & Dispatches for September 2018
Mercator said its total production of coal for the month of September 2018 stands at 183,485 MT, which is record production level from the present mines.
With this, the company has already achieved around 50 percent of its annual coal production guidance of approximately 2 million MT for FY19.
Additionally, the company has focused its efforts on higher production and Infrastructure throughput volumes going forward, it said.
Mercator has also surpassed its total internal monthly target with a record dispatch number of 378,312 MT through its coal handling infrastructure in September, including 3rd party dispatches.
FM Meets Pradhan as Fuel Prices Touch New High
Concerned over the spike in fuel prices, Finance Minister Arun Jaitley met Oil Minister Dharmendra Pradhan to look at options to mitigate its impact on the economy, sources aware of the discussion said.
The two ministers met last evening amid concerns of high fuel prices adding to farmers' distress, particularly in the upcoming Rabi crops season, sources said.
Diesel, which is being sold at record high prices, is the most used fuel in the farm sector. Tractors tilling the soil to irrigation pump sets - all use diesel, and a spike in its prices is bound to add to the cost cost of farming.
The two ministers are believed to have discussed options to mitigate the impact of rising international oil prices and rupee dipping to new lows. Source: PTI
Nitasha Shankar, Senior Vice President and Head of Research at YES Securities (I) said IIndian Markets have been seeing a sharp sell off on account of depreciation in rupee and higher crude prices.
This negative sentiment was further reinforced by the fear of liquidity crisis to support credit growth following the IL&FS scare, she added.
She believes that the long term story of Indian Markets remains intact.
Therefore this fall should be treated as an opportunity to accumulate fundamentally strong companies where valuations have corrected to attractive levels, Nitasha advised.
Kohinoor Foods in News
The food company said board of directors approved allotment of 58,14,000 number of warrants having attached thereto the right to convert into equal number of equity shares, to the promoters.
Board also approved allotment of 18,30,000 number of equity shares at Rs 76 per share amounting to Rs 13.9 crore pursuant to conversion of warrants into equal number of equity shares to the promoters (Jugal Kishore Arora, Satnam Arora and Gurnam Arora).
Eicher Motors Corrected 31.5% in last 11 trading sessions to hit fresh 52-week low of Rs 20,301.10.
Investors should stay cautious, focus on quality stocks: Reliance Securities
Rajeev Srivastava of Reliance Securities said higher crude prices along with weakening Indian Rupee is considered to be a double whammy for Indian economy in the context of widening current account deficit
Shriram Transport Finance Corporation on Buyers Radar
Share price of Shriram Transport Finance Corporation added 4 percent intraday as global research house UBS has maintained buy rating on stock with a target price of Rs 1,550, implying potential upside of 44 percent.
According to firm, the termination of SVL guarantee is a key positive. Recent liquidity crisis to hurt growth in Q3 but long-term impact is limited.
This is a preferred pick among NBFCs and expect re-rating driven by strong EPS growth, it said.