Sensex, Nifty Drop Most Since Brexit Vote On Flaring Indo-Pak Tensions
Indian shares climbed higher taking cues from Asian markets amid a rally in oil prices.
Closing Bell
Indian shares declined the most since June 24 Brexit vote after the Indian government said that it has conducted surgical strikes Wednesday night on terrorist launch pads in Pakistan.
The S&P BSE Sensex dropped 1.6 percent to 27,827, its first close below the 28,000-mark since August 29 while the NSE Nifty lost 1.7 percent to 8,591, its first close below the 8600-mark since August 26.
The market breadth was abysmal at 1,259 declines, 63 advances and 20 stocks remaining unchanged on the NSE.
After moving up by almost 30 percent in last six months, Kunj Bansal, ED & CIO, Centrum Wealth Management said, the market had been looking for some reasons to take a correction. He said there was nothing negative on economic parameters, so it seemed to have taken recourse in a non-economic reason to take a correction.
“Thursday’s correction will be followed by the Reserve Bank of India’s monetary policy review on Tuesday (October 4). Taking these two events together, we can witness some kind of consolidation in the market before it takes a fresh direction. Post these events, September quarter results are likely to be good and we should see market sentiment improving accordingly.”
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India Vix Jumps to 4-Month High
The India Volatility Index or VIX spiked 33.2 percent to 18.45. It is up over 44 percent since touching a 16-month low of 12.75 on September 6.
“See Value Rotation In Emerging Markets”
We need to see this in the context of the emerging market asset class that has seen good inflows. In case of geopolitical events like these, investors are bound to take cash off the table. Globally markets still seem to be very fragile owing to global growth concerns and I see a deep value rotation in emerging markets. However, the implementation of reforms like GST will have a positive impact on Indian equities.Mike Ingram, Market Commentator, BGC Partners told BloombergQuint in a telephonic conversation.
8620: The Nifty Level to Watch
Investors were sitting on profits and therefore chose to take them off the table in the backdrop of fresh tensions between the India and Pakistan. While I don’t see the issue escalating further, it would be advisable for investors to wait for a week or so before making a move.G Chokkalingam, Founder, Equinomics Research & Advisory told BloombergQuint
While the drop has been severe, the market has managed to bounce back a bit after reaching the low of 8,558, said Hemen Kapadia of KRChoksey Securities said.
We were anyway in a corrective phase and this news has just provided the excuse to fall further. The Nifty support levels to watch out for are 8,620 and then 8,530. A close above 8,620 will be crucial for our market.Hemen Kapadia, KRChoksey Securities told BloombergQuint in a telephonic conversation.
Meanwhile, Dipan Mehta, member of BSE said there could be an impact on the price to earnings multiple of the market.
This is definitely a knee-jerk reaction but a lot of uncertainty has crept into the market. What you need to understand that things like these are difficult to predict as we need to gauge the mood of the FIIs. So my sense is that we are in the middle of a highly fluid, uncertain situation. What a situation like this will do is that it will impact the price-earnings multiple that has risen significantly over the last few months. Technically too, we have breached many key levels so this is a wait and watch situation.Dipan Mehta, Member, BSE told BloombergQuint in a telephonic conversation.
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Market Slips After Indian Army Says It Conducted Surgical Strikes In Pakistan
The Sensex and the Nifty slumped after the Indian army said it has conducted surgical strikes on Wednesday night on terrorist launch pads in Pakistan. The rupee fell 0.4 percent to 66.7550 per dollar as of 12:27 p.m. in Mumbai, halting a five day gain.
For the full report, click HERE
Wockhardt Jumps After U.K. Drug Regulator Completes Inspection of Chikalthana Unit
Shares of the pharma firm rose as much as 4.5 percent after it said the U.K. drug regulator completed the inspection of its Chikalthana unit without any critical observations. The U.K. Medicines and Healthcare products Regulatory Agency (MHRA) has also maintained the approval status of the facility.
However, the plant still remains under an import alert received from the U.S. drug regulator on November 26, 2013. An import alert means that the drugs manufactured at the plant cannot be sold in the US markets.
Eros Soars On Pact With UAE Firm
Shares of film producing firm rose as much as 5.1 percent to Rs 220 after it announced a partnership with UAE’s largest film distribution network Phars Film.
The partnership will entail the two companies jointly co-producing Malayalam films along with exploration of theatrical rights between the two entities. The deal licenses Eros to exploit the distribution of all Malayalam movies produced jointly in India, while Phars Films would present the same overseas where it enjoys a dominant market share.
ICICI Pru Debuts At Rs 330, Down 1.2% From Issue Price
ICICI Prudential Life Insurance Company Ltd. listed at Rs 330 per share on the National Stock Exchange, at a 1.2 percent discount to the issue price of Rs 334.
The offer was open for subscription during September 19-21. The price band was fixed at Rs 300 - 334 per share. The insurer’s Rs 6,057 crore initial public offer was subscribed 10.45 times, with most demand coming in from the non-institutional investor category, which saw demand for 28.6 times the shares that were on offer. Qualified institutional buyers’ category was subscribed 11.8 times.
MCX Jumps 12%; Stock Up 11 Out of Last 12 Sessions
Shares of the commodity exchange gained as much as 12 percent to Rs 1,400, a new 52-week high for the stock. In fact, the scrip has been on a roll recently advancing 11 times in the last 12 sessions.
On Wednesday, market regulator SEBI introduced options in commodity derivatives, thereby enhancing the segment. Earlier, the exchange had increased trading charges for non-agri commodities.
The stock is up around 41 percent this month.
Market Movers: Hindustan Copper, UB Holdings, United Spirits, ONGC And More
Opening Bell
Indian shares climbed for second day in a row, in line with Asian markets, led by energy producers and automakers amid a rally in crude oil prices.
The S&P BSE Sensex gained as much as 0.6 percent to 28,475; while the NSE Nifty jumped 0.6 percent to briefly touch the 8,800-mark. The market breadth was firmly in favour of the bulls at 1144 advances, 299 declines and 411 stocks remaining unchanged on the NSE.
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Stocks to Watch
- Jaiprakash Associates: 88 percent of the company's shareholders approve the conversion of the company's debt into equity.
- ING to sell as much as $550 million of Kotak Mahindra shares: Terms
- Srei Infra says up to Rs 1,250 crore rupee bond issue closed Wednesday
- Aviation Stocks & Oil Stocks: OPEC agrees to first oil production cut in eight years to tackle oil prices.
- Pidilite Industries: Company announced a tie-up with WD-40 Company to distribute and sell WD-40's multi-use products.
- Max Ventures and Industries: Company's shareholders received an open offer from PVT Ventures and Siva Enterprises, to acquire 34.6 percent stake in the company for Rs 31.5 per share.
- Tata Steel to consider issue of NCDs on private placement
- Union Bank of India to exercise call option on 10 year bonds
- Idea Cellular: Company to issue non convertible debentures worth Rs 7,000 crore on private placement basis.
- Tata Steel: Looks to raise funds worth Rs 1,000-2,000 crore through sale of non convertible debentures. (Financial express)
- Sun Pharmaceuticals: Bombay High Court rejects the pharmaceutical’s writ petition to approve Metis as the reporting system and orders it to pay all pending salaries and expenses. (Press Trust of India)
- Tata Realty said to be front-runner for IDFC road asset (Economic Times)
For a complete list of stocks to watch, click HERE
IPO Watch
- Hindustan Copper OFS for non-retail investors opens today, government to sell 7 percent or 64.8 million shares, at a minimum price of Rs 62 each through stock exchanges
- ICICI Prudential share listing on NSE/BSE after IPO got 10.5 times demand at Rs 334 a share
Talking Points
- Financial Tech says HDFC Bank asked by ED to freeze an account
- SEBI introduces options in commodity derivatives
- India seen importing one million tonne sugar in 2016-17: Louis Dreyfus
- Sugar rises on bigger deficit forecasts from Brazil
- India raises coal sale cap for small, medium firms to clear glut
- India top court allows marine to stay in Italy
- Nepal said to call off SAARC 2016 Summit
- Top court extends Sahara head Roy’s parole until October 24
- Global funds buy Rs 73.83 crore of local stocks; domestic funds sell Rs 69.53 crore yesterday: Provisional data
Good Morning!
The Nifty futures on the Singapore Exchange, an early indicator of the Nifty performance in India, climbed 0.5 percent to 8,806.
U.S. stocks rose Wednesday, with energy shares rallying the most in eight months, as Organization of Petroleum Exporting Countries (OPEC) agreed to a preliminary deal that will cut production for the first time in eight years.
Markets were taken aback by the oil-output deal, with Saudi Arabia and Iran wrong-footing traders who had expected a continuation of the pump-at-will policy the OPEC adopted in 2014.
Fed Chair Janet Yellen told lawmakers that the U.S. will continue to add jobs at a solid rate, though the recent average pace is probably higher than what’s sustainable over the long term and would eventually cause the economy to overheat. She also said the current course calls for a gradual increase in interest rates, something that doesn’t have a fixed timetable.
This morning Asian markets rose setting the MSCI Asia Pacific Index on course for its best quarter in more than four years.