Nifty Falls Most In Nearly Two Years Amid Rising Crude, Falling Rupee
Closing Bell: Sensex Drops Over 800 Points
Indian equity benchmarks fell to their lowest level in over three months after Brent Crude rose to its highest level in four years and rupee fell to a record low of 73.82 per dollar raising concerns over widening current account deficit.
The S&P BSE Sensex fell 2.24 percent or 806 points to 35,169 and the NSE Nifty 50 index dropped 2.4 percent or 259 points to 10,599.
Large-cap stocks like Reliance Industries, HDFC Bank, TCS, Infosys and ITC led declines in today’s session. ICICI Bank rose the most in two months after its MD and CEO Chanda Kochhar stepped down amid an ongoing probe into alleged impropriety.
All sector gauges compiled by BSE ended lower dragged by the S&P BSE Energy Index’s worst single-day fall since August 2015 after the government announced to cut fuel excise duty by Rs 1.5 a litre and asked oil marketing companies to bear burden of Re 1 per litre on sales of petrol and diesel.
The mid- and small-cap shares were in line with larger peers as the S&P BSE MidCap and S&P BSE SmallCap Indexes fell 2 percent each.
The Reserve Bank of India’s monetary policy committee is expected to raise repo rate tomorrow by 25 basis points to a 2-1/2 year high of 6.75 percent. However, investors will watch whether the central bank drops a neutral stance that has been in place in its statement since February 2017.
OMCs Drop On Being Asked To Absorb Price Cut
Shares of oil marketing companies slumped after Finance Minister Arun Jaitley announced to cut fuel price by Rs 2.5 per litre.
- Government has cut excise on petrol and diesel by Rs 1.5 litre.
- Oil marketing companies have been asked to bear remaining burden of Re 1 per litre.
- Indian Oil slumped 18.24 percent
- BPCL tumbles 19 percent
- HPCL drops 22 percent
Government To Cut Petrol, Diesel Price By Rs 2.50/Litre: Jaitley
Finance Minister Arun Jaitley is briefing media on rising oil prices.
Key highlights of the briefing:
- Fuel relief steps to widen fiscal gap by 0.05 percent of GDP
- Fuel retailers healthy enough to absorb relief steps
- Not going back on fuel price deregulation
- Diesel and petrol prices to be cut by Rs 2.5 per litre
- Centre to cut excise duty on petrol and diesel by Rs 1.5/litre and OMCs will absorb burden of 1 rupee per litre
- Brent oil crossed $86/barrel, highest in last four years
- Interest rates in U.S. have increased to 3.2 percent, the highest since 2011
- Both these developments have led to a situation which has had significant impact on the markets
- Many steps have been taken by the government, borrowing has been cut by Rs 70,000 crore and allowed OMCs to raise $10 billion
Jet Airways Advances Most In Over Three Years
Shares of the Mumbai-based airline operator rose as much as 15.18 percent, the most in over three years, to Rs 204.10 on heavy volumes.
Trading volume was 1.5 times its 20-day average, according to data compiled by Bloomberg.
Market Check: Sensex Drops 900 Points, Nifty Drops Nearly 10% From August Peak
Indian equity benchmarks extended decline as bluechip stocks like Reliance Industries, HDFC Bank, TCS, Infosys and Kotak Mahindra Bank came under heavy selling pressure.
The S&P BSE Sensex slumped 2.54 percent or 912 points to 35,063 and the Nifty 50 Index plunged 2.65 percent or 288 points to 10,570.
With today's fall, the Nifty has almost wiped out entire gain of the current calendar year as it has corrected 9.3 percent from the record high on Aug. 28.
For the year, Nifty is just up 0.6 percent with stocks like Tata Motors, Bharti Airtel and HPCL down over 40 percent.