3:30 pm Market close: The market ended with severe cuts dragged sharply by banks. The Sensex dived 586.65 points or 2.2 percent at 25696.44, and the Nifty slipped 185.45 points or 2.3 percent at 7785.85. About 620 shares advanced, 2064 shares declined, and 100 shares were unchanged.
Bank Nifty fell 3.7 percent while Auto index was down 2.5 percent from previous close. Hindalco, Axis Bank, Vedanta, M&M and Tata Steel were major laggards. Sun Pharma was the only green stock in the Sensex.
3:15 pm Nomura on banks: The recent base rate cuts are likely to have an impact on net interest margin of banks in near-to-medium term but that is credit-positive in long run, says Nomura. HDFC Bank announced a big 35-basis point cut in its base rate to 9.35 percent from 9.7 percent (taking a cumulative base rate cut of 65 basis points from January 2015), the lowest in industry.
It was the third rate cut by the bank. The country's second largest private sector lender cut base rate by 15 bps on June 17 and by 15 bps on April 7. Canara Bank also cut base rate by 10 basis points to 9.9 percent on Monday.
Most banks till date have cut base rates by around 25-30 basis points and after this cut by HDFC Bank, their base rates are around 35-65 bps higher than HDFC Bank – such a large differential is difficult to sustain beyond 1-2 months, feels Nomura.
3:10 pm Market outlook: Market watchers are overestimating the impact of China's economic slowdown on emerging markets, JPMorgan's chief Asian and emerging market equity strategist said Monday.
Emerging markets suffered one of their worst routs on record last week, with investors pulling a combined USD 15.3 billion from bond and equity funds through August 27. The MSCI Emerging Markets Index is down nearly 18 percent year to date.
But JP Morgan's Adrian Mowat noted the US economy moved higher, and there was little impact on the rest of Asia when Japan's economy, then the world's second largest, turned lower in the early 1990s.
3:05 pm Market Update: The Sensex plunged 649.19 points or 2.47 percent to 25633.90 and the Nifty dropped 204.85 points or 2.57 percent to 7766.45.
About 478 shares have advanced, 2133 shares declined, and 97 shares are unchanged on the BSE.
3:00 pm German data: Rising output and orders helped Germany's manufacturing sector expand at its fastest pace in sixteen months in August, adding to signs that exports may help fuel growth in Europe's largest economy in the third quarter.
Markit's purchasing managers' index (PMI) for manufacturing, which makes up about one fifth of the German economy, rose to 53.3 from 51.8 in July.
That was above the 50 line that separates growth from contraction and slightly higher than a preliminary estimate of 53.2.
2:55 pm PNB slips 7%: Fitch Ratings says PNB's viability rating (VR) has been downgraded by one notch to 'bb' to reflect the growing risk to the bank's capital position from its mounting stock of stressed assets, which has risen at a faster rate than its capital replenishment.
The downgrade also reflects Fitch's expectation that capital buffers are unlikely to improve significantly even though the state is likely to inject capital into the bank in the financial year ending 30 March 2016 (FY16), with the bank's large stressed assets stock potentially taking longer to resolve than that of its peers.
Fitch Ratings has affirmed the ratings on nine Indian banks. The long-term issuer default ratings (IDR) on State Bank of India (SBI), Bank of Baroda, Bank of Baroda (New Zealand), Punjab National Bank (PNB), Canara Bank, IDBI Bank, ICICI Bank and Axis Bank have been affirmed at 'BBB-' while Indian Bank has been affirmed at 'BB+'. The outlook on the IDRs is stable, says Fitch.
2:50 pm Gold tops 27000: Rising for the third straight day, gold regained the Rs 27,000-mark by gaining Rs 200 at the bullion market today in line with a firm global trend amid pick up in wedding season buying by jewellers.
Silver too continued its upward journey and rose by Rs 150 to Rs 35,150 per kg on increased offtake by industrial units and coin makers.
Bullion traders said a firming global trend where gold extended its best monthly gain since January after a factory gauge in China shrank to a three-year low, deepening concern about the slowdown in the world's second-biggest economy and boosting demand for the metal as a safe-haven.
Globally, gold climbed 0.7 percent to USD 1,142.79 an ounce and silver added 0.3 per cent to USD 14.67 an ounce in Singapore.
2:45 pm Interview: At a time when talks are hinging on highly leveraged banking names that are fuelling market nervousness, YES Bank is hoping to regain its market position and is looking to enter the consumer and retail segment. YES Bank, with is high exposure to the corporate segment is among the highly-leveraged banks. Corporate loans constitute about two-thirds of the bank’s portfolio.
Speaking to CNBC-TV18, Rana Kapoor, MD & CEO of YES Bank, says that the bank is looking to shift its focus to retail and small and medium enterprise (SME) segments. The bank currently has 35 percent of its business in retail and SMEs.
Kapoor expects bank’s SME share to grow to 55 percent in a year. By 2020, the bank is aiming for 45 percent involvement in retail segment and hopes to become third largest player.
Discussing the risk in commodities and infrastructure sector, Kapoor says the bank’s exposure to steel is around 3 percent in small and medium size credit. He does not see any risk in infrastructure or its related sectors like cement.
2:40 pm Sharp fall in US likely?: The 300-points decline in Dow Jones futures suggested that US markets may open sharply lower on fears of China slowdown.
Data overnight showed activity in China's manufacturing sector slowed markedly in August, another signal that the world's second-largest economy is losing momentum.
2:35 pm Market falls further: The Sensex crashed 619.21 points or 2.36 percent at 25663.88 after hitting day's low of 25579.88 (down 703 points). The Nifty dropped 200.35 points or 2.51 percent to 7770.95.
The BSE Midcap cracked 2.4 percent and Smallcap lost 2.7 percent. About 459 shares have advanced, 2133 shares declined, and 83 shares are unchanged on the BSE.
2:30 pm Escorts dives: Escorts's total tractor sales plunged 33.7 percent to 2,402 units in August against 3,624 units sold in the year-ago period. Domestic sales declined 25.2 percent to 2,355 units on monsoon concerns.
2:25 pm Oil also sinks: Crude oil prices fell nearly 4 percent as investors taking profits after Brent and US crude soared significantly in previous sessions.
Brent crude dropped 3.77 percent to USD 52.11 a barrel and NYMEX crude declined 3.88 percent to USD 47.29 a barrel.
2:20 pm Telephone subscriber base: The total telephone subscriber base in the country rose marginally to reach 100.69 crore at the end of June, sectoral regulator TRAI said today.
The subscriber base stood at 100.20 crore at the end of May, Telecom Regulatory Authority of India (TRAI) said. The wireless base (GSM and CDMA) rose 0.51 percent to 98.08 crore at the end of June from 97.57 crore in May, while the fixed line base declined to 2.61 crore from 2.62 crore.
"As on June 30, 2015, the private access service providers held 91.75 percent market share of the wireless subscribers whereas BSNL and MTNL, the two PSUs access service providers, held only 8.25 percent market share," TRAI said.
The wireless tele-density increased to 77.90 percent from 77.58 at the end of May. Wireless subscription in urban areas increased to 56.29 crore at the end of June from 55.88 crore last month and wireless subscription in rural areas increased from 41.69 crore to 41.78 crore during the same period.
2:15 pm Shakers & Movers: Axis Bank topped the selling list on Sensex, down over 5 percent followed by Coal India and Hindalco Industries with 4.5 percent loss.
The sharp fall in HDFC, HDFC Bank, L&T, ITC, ICICI Bank, SBI, Reliance Industries, Lupin, Tata Motors, Bharti Airtel (which dropped 2-3.5 percent) indicated that there may be some selling by FIIs.
FIIs sold more than Rs 17,500 crore worth of equity shares in August, the biggest ever in last 10 years. In 2008 crash, they sold Rs 17,326.30 crore worth of shares in January.
However, Sun Pharma, Infosys and TCS bucked the trend, up 0.2-0.6 percent, though they came off day's high.
2:10 pm China PMI drags Asia: Asian stocks slumped on the first trading day of September, with Japan's Nikkei 225 index chalking up a near 4 percent loss, after surveys of China's mammoth manufacturing sector showed a further loss of momentum in the world's second-biggest economy.
China's Shanghai fell 1.3 percent and Hang Seng declined 2.2 percent. Kospi was down 1.4 percent.
2:05 pm Europe extends losses: European stock quickly accelerated losses, as China's economy continued to disappoint investors.
London's FTSE 100, Germany's DAX and France's CAC declined 2.5 percent each.
Two sets of key Chinese data disappointed traders on Tuesday; the official manufacturing purchasing managers' index (PMI) edged down to 49.7 in August from 50 in July, while the final Caixin/Markit manufacturing PMI came in at 47.3 in August, down from 47.8 in July.
2:00 pm Market check:
The market extended losses in afternoon trade, dragged by banking & financials. The Sensex plunged 562.54 points or 2.14 percent to 25720.55 and the Nifty crashed 179.95 points or 2.26 percent to 7791.35.
The BSE Midcap and Smallcap indices, too, fell over 2 percent each. About four shares declined for every share advancing on the Bombay Stock Exchange.