The Nifty50 extended losses for the second consecutive session on Tuesday, falling briefly below 11,500 levels intraday after the rupee hit record low of 71.57 to the dollar and rising crude oil prices. The index closed sharply lower, forming bearish candle on the daily charts.
All sectoral indices closed in the red with Bank, Auto, FMCG, Metal and Pharma correcting upto 2 percent while IT was the only gainer, rising 2 percent on rupee weakness.
The midcaps and smallcaps hit hard as the Nifty Midcap and Smallcap indices fell more than 2.5 percent.
The Nifty50 remained volatile from the beginning of trade, opening at 11,598.75 and closing at 11,520.30. The index after opening higher fell immediately and bounced back to hit an intraday high of 11,602.55, but erased those gains to trade lower. It managed to rebound in afternoon but failed to hold those gains and hit an intraday low of 11,496.85 before closing 62.10 points down at 11,520.30.
India VIX moved up by 2.87 percent to 13.78 and a sudden jump in volatility in last two sessions is a cause of concern for immediate basis.
Stay tuned to Moneycontrol to find out what happens in currency and equity markets today. We have collated a list of important headlines from across news agencies.
US markets end lower
US stocks fell on Tuesday as trade concerns lingered and declines in Facebook and Nike shares weighed on Wall Street’s major indexes, though data showing US manufacturing activity accelerated in August kept losses in check. Facebook Inc shares fell 2.6 percent after brokerage MoffettNathanson downgraded the social media company, warning of revenue growth deceleration.
The Dow Jones Industrial Average fell 12.34 points, or 0.05 percent, to 25,952.48, the S&P 500 lost 4.8 points, or 0.17 percent, to 2,896.72 and the Nasdaq Composite dropped 18.29 points, or 0.23 percent, to 8,091.25.
Oil prices drop as storm threat eases on US Gulf coast
Oil prices fell on Wednesday, partly reversing a strong jump from the previous day, as the impact of a tropical storm on US Gulf coast production was not as strong as initially expected. US West Texas Intermediate (WTI) crude futures were at USD 69.34 per barrel at 0036 GMT, down 53 cents, or 0.8 percent, from their last settlement. International Brent crude futures fell 34 cents, or 0.4 percent, to USD 77.83 a barrel.
Asian markets follow global peers, trades lower
Asian stocks tracked their global peers lower while the safe-haven dollar was broadly higher on Wednesday as worries over persistent trade conflicts curbed investor appetite for riskier assets. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 percent. Australian stocks lost 0.4 percent, South Korea's KOSPI dropped 0.3 percent and Japan's Nikkei shed 0.25 percent.
SGX Nifty
Trends on SGX Nifty indicate a negative opening for the broader index in India, a fall of 22.5 points or 0.19 percent. Nifty futures were trading around 11,560-level on the Singaporean Exchange.
Rupee manages to close at fresh record low of 71.58/$
The Indian rupee managed to end at a fresh record low of 71.58 per US dollar on Tuesday, owing to concerns on high crude prices and wariness among FPI investors for KYC norms. On Monday, it had closed at 71.21 per dollar. The currency had staged a recovery to trade positively around 71.19 per dollar range, after hitting a record low of 71.37 in the early trade on Tuesday.
Most experts are penciling in a near-term target of Rs 72-73/USD for the rupee. Both local, as well as global factors, are weighing on the currency.
Indian cos foreign investment decline 36% to $1.39 bn in July
Investment by Indian companies in their overseas ventures fell by more than 36 percent to USD 1.39 billion in July this year, the Reserve Bank data showed. India companies had invested USD 2.17 billion in their overseas subsidiaries and joint ventures in the form of loan, equity and issuance of guarantee in July 2017.
In June 2018, domestic firms invested in USD 2.07 billion in their ventures located out of India. Of the USD 1.39 billion invested in July this year, USD 608.52 million was the equity capital, USD 406.74 million was through loan and USD 371.86 million came in the form of issuance of guarantees.
India's FY19 growth to moderate after strong start: Report
India's growth rate is expected to moderate this fiscal despite a strong start in the April-June quarter largely owing to tighter financial conditions, limited fiscal headroom and upcoming elections, says a DBS report. "We doubt that India can sustain a growth trajectory above 8 percent for the rest of this fiscal," DBS said in a research note, adding that "We expect FY19 growth to moderate to 7.4 percent this year".
According to the global financial services major, dissipating base effects, tighter financial conditions and limited fiscal headroom will come together to moderate growth this fiscal. The report further noted that upcoming elections (states and general polls) also add to the uncertainties for the investment community.
Rupee to stablise on its own, dip not due to domestic factors : Govt
With the rupee hitting a fresh low, the government said the currency will stabilise on its own as there are no domestic factors contributing to this depreciation. The rupee hit a life low of Rs 71.57 to a US dollar earlier on, making imports costlier and putting price pressures.
"Rupee has depreciated primarily on trade war fears and rise in global crude oil prices. The government does not have control over these so there is only so much we can do," a top official in the finance minister, who wished not to be identified, said. The currency, he said, "will stabilise on its own as there are no domestic factors that contribute to this depreciation".
NSE flags concern over cyber attacks on financial market
The National Stock Exchange (NSE) yesterday raised concern over potential for large-scale cyber attacks on financial market infrastructure and called for setting up the standards to bring about the change through talent empowerment and investment in innovation.
Increasing global interconnectedness and complexity of systems make the risk of a large scale cyber attack even more pertinent and threaten the stability of financial markets, its managing director and chief executive officer, Vikram Limaye, said Tuesday at the 'NSE Future Tech 2018'. "The potential for large-scale cyber attacks on financial markets infrastructure at a very low cost is a major risk across the globe," he added.
Amazon hits $1 tn market value milestone
Amazon.com Inc on September 4 joined Apple Inc in the USD 1 trillion club, becoming the second member of the group after its stock price doubled in 15 months. If the online retailer's share price continues at its recent pace, it will be a matter of when, not if, Amazon's market valuation eclipses that of iPhone maker Apple, which reached USD 1 trillion on August 2.
"Amazon's a little bit more dynamic than Apple because the iPhone has become more mature. Amazon's cloud business is an extra growth driver that Apple doesn't have," said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta, Georgia who describes Amazon's cloud services as its "crown jewel."
No transaction fee on cross currency derivatives trade till Aug 2019: BSE
Leading stock exchange BSE has extended the time period for not levying any transaction fee on the trades done in cross currency derivatives for one year till August 2019, in order to encourage active participation in such contracts. The decision has been taken after taking feedback from market entities.
The exchanges launched trading in cross-currency futures and options (F&O) derivatives in February. The trading in such contracts is available between 9:00 AM and 7:30 PM. The move was aimed at helping in direct hedging of foreign currency exposures as well as improving liquidity in existing currency contracts.
Govt rules out excise duty cut as petrol, diesel prices hit new highs
The government will not cut excise duty on petrol and diesel to cushion spiralling prices, which touched fresh highs on Tuesday, as it has limited fiscal space available to take any dent in revenue collections, a top finance ministry official said.
With imports becoming costlier because of a free fall in the rupee against the US dollar, the government believes the current account deficit will overshoot the target and it cannot “disturb fiscal maths by cutting excise duty on petrol and diesel,” according to the official quoted above. Petrol and diesel prices on Tuesday touched fresh highs as rupee dipped to a record low of 71.54 against US dollar, making imports costlier.
One stock under ban period on NSE
Securities in ban period for the next day's trade under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
For September 5, Adani Enterprises is present in this list.
With inputs from Reuters & other agencies
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