Equities see biggest drop in 2 years, Sensex down 700 pts

Apart from an one hour consolidation period, just before the European markets opened, Indian markets witnessed selling throughout the day. This resulted in the BSE Sensex falling 704 points to 16,361, a drop of 4.13 percent, while the NSE Nifty fell by 204 points to 4,923, its largest since 2009 . Rupee too kept on sliding, touching a 25-month low at 49.54.

All the sectoral indices were in red with the biggest fall being recorded by realty sector. News of government contemplating a realty regulator led to a sharp decline in all the stocks in the sector.

Frontline stock Reliance fell by 6.80 percent on reports quoting oil ministry sources as saying that the company’s cost recovery will be cut by $1.8 billion. This led to a sharp fall in the stock, which crashed from Rs 805 levels to Rs 780.

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Among the othernoticeablestocks that fell were JP Associate which fell by 9.8 percent, RCOM was down by 8.26 percent, DLF down by 7.8 percent. BPCL, who announced an oil find in Brazil along with Videocon was the least impacted, with the stock falling by only 0.15 percent.

European markets continue to remain low with an average fall of 4.5 percent. Euro fell against the dollar to 1.3454, its lowest level since February. Dow Futures are trading 2 percent lower, while both oil and gold are trading nearly 4 percent lower in the international markets.

With the rupee continuing to fall in the spot market against the dollar, it looks like there is still some more selling left in the market.

**3.00 p.m:**The bloodbath on the markets continues, with the Sensex falling more than 700 points to 16,335; the Nifty is down by more than 200 points at 4910.

The rupee nosedived to a low of 49.18 against the dollar, with no news of any intervention from the central bank.

The realty index plunged by 5.6 percent, followed by the banking index, which fell by 3.8 percent.

Reliance Industries has fallen by 6.1 percent to touch Rs 785, while JP Associates fell by 8.5 percent to Rs 67.65. Tata Motors is down by 6.4 percent.

KS Oils has recovered some lost ground after the company announced a debt restructuring plan. It is trading 1.8 percent higher at Rs 11.30.

2.15 p.m: Markets hit a new low with the Sensex falling by 537 points at 16,517, while the Nifty crashed 163 points to 4,970. European markets too extended their losses falling by 4 percent.

The rupee slipped further to Rs 49.10 as traders awaited RBI intervention.

Realty sector remains the biggest loser, shedding nearly 4.7 percent, followed by banking, which has fallen by 3.1 percent.

JP Associates is down by 7 percent, while JSW Steel is down 5.23 percent; both rank among the biggest losers in the most traded stocks.

Defying the trend, Arvind has touched a new five-year high at Rs 98.95.

Market breadth continues to remain extremely negative, with seven stocks falling for every stock rising.

Crude oil is down by 2.7 percent in the international markets, while gold has slipped by 1.8 percent.

1.30 p.m: Indian indices are still trading near their low of the day as European markets open sharply Lower. The Sensex has plunged 470 points to 16,593, while the Nifty has slipped by 146 points to 4,986. European markets have opened sharply lower with all the the major indices trading 3 percent lower. Hang Seng is trading 4.9 percent lower than its previous close, its lowest level in the last two years.

The rupee, meanwhile, tumbled below 49 against the dollar but has now pulled back slightly to 48.96, as foreign investors continue to withdraw funds from the market.

All index stocks and sector indices continue to trade in red. Realty index is the biggest loser with a drop of 4 percent. The government is contemplating setting up a realty regulator which can lead to further downgrades in the sector as transparency in the sector increases.

News of foreign airlines being allowed to buy in Indian airline companies led to a brief rally in the sector’s stocks.

JP Associates has fallen by over 5.28 percent; it is the biggest loser among the top traded stocks.

Citi has given a ‘Buy’ rating to Phoenix with a price target of Rs 257. The stock currently trades at Rs 216, down by 0.46 percent.

12.00 p.m: Indian markets touch a new low; the Sensex falls by 440 points to 16,625,while the Nifty is d0wn by 136 points at 4,996.

JSW Steel and Tata Motors are both lower by 4.5 percent. All the stocks in the Sensex and sector indices are in the red. The realty index is down by nearly 3.5 percent. Media reports are saying that a central real estate regulator may be created soon and that cabinet approval is being sought for the same. Market breadth is extremely negative with 6 stocks falling for every stock rising.

Weak economic data coming out of China has further eroded confidence in the Asian markets. China’s manufacturing data, which were expected to post moderate growth, have, in fact, posted negative growth. The Hang Seng fell nearly 4 percent, while Japanese markets closed 2.1 percent lower.

Meanwhile, Goldman Sachs initiated a ‘Buy’ report on Havells, with a price target of Rs 438. Havells is trading 0.39 percent higher at Rs 371.50. Goldman Sachs has however, maintained a ‘Neutral’ rating on Crompton Greaves on account of slowing growth.

IVRCL has said that it has bagged orders worth Rs 2228.94 crore, the stock is trading 3.17 percent lower than the previous close at Rs 39.65.

Gold and oil prices have fallen by 1.75 percent each in the international markets.

11.15 a.m: Markets continue to trade near the low of the day with the BSE Sensex trading at 16,742, down by 322 points. The Nifty is down 95 points at 5,037. The Dow futures are also trading 400 points lower.

All sector indices continue to be in red; realty is the biggest loser.

JSW Steel is the biggest loser among the most actively traded stocks, losing over 4 percent to Rs 651, while Tata Motors has also lost nearly 4 percent and currently trades at Rs 158.

Meanwhile,Citi has pointed out that auditor’s qualifying remarks cover nearly 50 percent of Punj Lloyd’s balance sheet. Adjusted for these remarks, the book value of the company is Rs 47 compared with the reported level of Rs 90. The broking house gives a ‘Sell’ reccomendation on the company with a price target of Rs 52. The stock currently trades at Rs 60.

In its telecom report, JP Morgan points out to that GSM subscriber numbers have fallen by 30 percent in August, one of the worst in the recent past. Except for Idea Cellular, all the other companies have posted a decline in their numbers.

Macquarie in its report on metals and mining says that outlook remains uncertain due to low European demand. It however, points out that steel margins are bottoming out.

10.30 a.m: Markets touch a new intraday low, with the BSE Sensex hitting 16,740, down by 324 points, while the NSE Nifty is down by 101 points at 5032.

All the stocks on the Sensex are in the red; so are all the sector indices.

Sterlite Industries is the biggest loser among index stocks, falling by 4.17 percent to Rs 128.60, followed by Tata Motors which is down by 3.96 percent.

BHEL has touched a new year-low with the share price at Rs 1,618, down 1.02 percent. SBI is down by nearly 2.5 percent at Rs 1,958.Reliance in trading 2 percent lower at Rs 820.

L&Tannounced that it has bagged a Rs 700 crore order in Oman, the stock barely responded to the news and currently trades near its low of the day at Rs 1,527, down 2 percent.

NMDC announced it had bought 50 percent in Legacy Iron Ore of Australia. The stock, however, is down 1.27 percent at Rs 248.95.

Realty is the biggest sector loser, falling by nearly 3 percent; in contrast, the pharma sector has limited its losses to less than one percent. IT index is also down by nearly 1.61 percent, despite the rupee touching a new two-year low.

9.30 a.m: Markets opened sharply lower with the BSE Sensex at 16,824, down by 240 points, while the NSE Nifty is trading at 5053, down by 79 points. All sectoral indices are trading in the red, with metals being the biggest loser, falling by 2.4 percent.

BPCL announced that it has discovered oil and gas in Brazil. The stock has moved 0.85 percent higher over its previous close and trades at Rs 669.60.

Tata Motors is the biggest loser among the top traded stocks, down by 3.73 percent, followed by Bajaj Auto, which is down by 3 percent. ONGC and Tata Power are the only two stocks in the index in the positive zone; ONGC trades 0.23 percent higher at Rs 261.70, while Tata Power is up 0.16 percent at Rs 1,001.

The rupee, meanwhile, touched a new two-year low of Rs 48.79 against the dollar.

Suzlon, meanwhile, said that they will be buying out the minority shareholders of RE Power. The stock is down by 3.16 percent at Rs 39.90.

Astral Poly, as expected, has hit the upper circuit of 20 percent of Rs 219.15 on news that Lubrizol, a subsidiary of Berkshire Hathway, will be making a joint investment with Astral in Gujarat.

Everonn has also hit the upper circuit at Rs 404.90, up by 5 percent. The stock is on an up move on account of the likelihood of an open offer at Rs 528 per share.

Eicher Motors touched a new high after Bank of America increased the price target of the stock, as mentioned in our post yesterday.

Stocks that have paid lower taxes are all trading lower. SBI, at Rs 1,957, is down by 2.55 percent; Bharti Airtel is trading lower by 2.45 percent; Maruti is 1.41 percent lower at Rs 1,106.

9.00 a.m: A hawkish stance taken by the Fed has led to markets tanking across the globe. US markets fell by 2.5 percent after the Federal Reserve System decided to keep interest rates unchanged but shifted its borrowing from near-term to long-term. Asian markets are spooked by the action too as can be witnessed by the 3.9 percent fall in the Hang Sang; the Nikkei and the Shanghai index are down by 1.5 percent each.

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Indian markets are likely to open lower in line with the events unfolding in international markets. What is also likely to impact FII flows is the news of Lloyds pulling out of European banks and the fact that Moody’s has downgraded Citi, Bank of America and Wells Fargo.

Among the stocks that will see action due to news flows are Pipavav Shipyard, which is likely to see selling pressure after the government said that it may interfere in its deal with Mazgaon Dock after complaints were filed by ABG Shipyard and L&T.

Astral Poly can witness buying interest as a subsidiary of Buffett’s Berkshire Hathway, Lubrizol, is setting a joint venture unit with it in India.

Mercator Lines announced it has bought 50 percent stake in an Indonesian mine; the stock can see some buying.

Cement majors ACC and Ambuja can see some selling on news of their merger being deferred indefinitely.

Apollo Hospital can move up as it has decided to divest its minority stake in its BPO.