The market witnessed a sharp fall in a sell-off across Asian emerging markets after the central bank in Thailand said international investors must pay a 10 percent penalty to take funds out of the country within a year. The Thai central bank's currency controls heightened concern about emerging markets.
All the BSE sectoral indices ended in red with shares from IT and capital goods segment suffering the most.
Sensex plunged around 500 points in mid afternoon trade on intense selling pressure to touch an intra-day low of 13237.39, but recovered from lower level as value buying emerged. The barometer index lost 349.08-point (2.54%) for the day to settle at 13,382.01. Its high for the day was at 13748.62. It oscillated sharp 511.23 points during the day, with high volatility.
The S&P CNX Nifty lost 96.75 points (2.46%) to 3832.
Thai stocks plunged the most in 16 years, triggering declines across Asia's emerging markets, after the central bank said international investors will have to pay a 10% penalty on funds withdrawn out of the country within a year. The new regulations require investors to lock up 30 percent of foreign-exchange deposits for a year to deter speculation. Starting with funds transferred to Thailand today, overseas investors will be penalized 33 percent of that 30 percent portion to withdraw funds within one year. They can freely move investments between asset classes within the country.
Back home, the data showing substantial FII sales on Monday (18 December) also dampened the sentiment today.
The total turnover on BSE amounted to Rs 4114 crore.
Market breadth was negative on BSE, with 1.8 losers for every gainer, as selling pressure emerged for small-cap and mid-cap stocks. On BSE, 1641 shares declined as compared to 919 that advanced. 69 remained unchanged. The BSE Mid-Cap index lost 1.21% while the BSE Small-Cap index declined 1.07%.
All the Asian markets were trading with losses except China’s Shanghai Composite, which was up 1.36%. Japanese stocks declined for the first time in seven days, led by brokerages such as Daiwa Securities Group Inc., after the nation's securities watchdog recommended Nikko Cordial Corp. be fined because of false earnings statements. The Nikkei 225 index was down 1.09% while the Hang Seng index lost 1.19%. The Bank of Japan today kept interest rates unchanged at 0.25%.
From the 30-Sensex pack, 29 declined while Hero Honda (up 0.89% to Rs 757) was the lone gainer.
PSU engineering major Bhel was the top loser, down 5.39% to Rs 2262.35 on 6.40 lakh shares. It had lost 4.21% on Monday (18 December). Market men attribute this fall to likely loss of equipment orders for the upcoming ultra mega power projects the bids for which were opened on Monday. According a report by domestic brokerage, Bhel’s cost competitiveness for supercritical equipment comes under question given the large disparity in bid prices between the lowest bidder, Lanco (at Rs 1.19 per unit) and NTPC (at Rs 2.1/unit). Reports suggest that Lanco had tied up with Chinese equipment supplier Dongfang, while NTPC had tied up with Bhel for ultra mega power project.
NTPC slumped 5.05% to Rs 133.60 on high volumes of 26.17 lakh shares. The stock moved in a range of Rs 132.70 – Rs 142.
Reliance Communications (down 4.80% to Rs 445.45), L&T (down 4.21% to Rs 1410) and ACC (down 3.82% to Rs 1013) were the other losers.
Index heavyweight Reliance industries (RIL) was down 3.20% to Rs 1248 on 17.42 lakh shares notwithstanding reports that Reliance Industries and its partner Niko Resources have discovered huge oil in the hydrocarbon rich Krishna-Godavari basin. It had slipped to a low of Rs 1231.
Tata Steel lost 3.23% to Rs 452.30 on 13.02 lakh shares. It had advanced to a high of Rs 475 following reports the UK Takeover Panel is putting the Corus deal on the fast track by planning to auction Anglo-Dutch steel company to the two rival suitors Tata Steel and Brazil’s CSN.
Reliance Industries (RIL) was the most active counter on BSE with turnover of Rs 219.19 crore followed by Bhel (Rs 147.55 crore) and Tech Mahindra (Rs 128.12 crore).
Madhucon Projects was down 6.81% to Rs 294 on high volumes of 12.07 lakh shares. The counter saw three block deals (3.54 lakh shares at Rs 320 per share), (4.42 lakh shares at Rs 305 per share), (2.98 lakh shares at Rs 303 per share).
The BSE capital goods index, tanked 3.28% or 301.60 points, and was the biggest loser among the sectoral indices. Crompton Greaves (down 6.3% to Rs 193), Bharat Electronics (down 4.99% to Rs 1252), SKF Bearings (down 3.20% to Rs 277.20), BEML (down 3.86% to Rs 925), ABB (down 3.62% to Rs 3535), Punj Lloyd (down 4.15% to Rs 977.15), and Siemens India (down 2.82% to Rs 1130), lost ground apart from Bhel and Larsen & Toubro (L&T).
The BSE IT Index settled with 3.02% or 157.22 point loss. Frontline IT stocks edged lower on the back of overnight fall in tech laden Nasdaq composite index. Infosys (down 3.20% to Rs 2152), Satyam Computer (down 3.51% to Rs 463), TCS (down 3.52% to Rs 1140), Wipro (down 3.21% to Rs 563.25). Infosys ADR lost 2% on Monday to $53.64, Satyam Computer ADR shed 2.4% to $23.50 and Wipro ADR lost 0.7% to $15.65.
In a weak market sugar shares were able to hold their early gains as buying continued after the Union Cabinet on Monday decided to allow sugar companies with export obligation under the Advance License (AL) scheme to undertake exports. Under AL scheme, companies have to re-export one tonne of white sugar against every 1.05 tonne of raw sugar imported within a period of two years.
Uttam Sugar (up 3.61% to Rs 136.50), Sakthi Sugar (up 3.80% to Rs 106.50), Ugar Sugar Works (up 7.51% to Rs 17.90), Mawana Sugar (up 3.78% to Rs 52.15), Dhampur Sugar (up 4.44% to Rs 92.90), Balrampur Chini Mills (up 3.89% to Rs 85.50), Ponni Sugars (up 3.86% to Rs 52.50), Triveni Engineering (up 3.85% to Rs 52.55), and Simbhaoli Sugar (up 2.47% to Rs 64.40) surged.
Lupin declined 3.56% to Rs 560 after the drug maker said it had received tentative approval from the US Food and Drug Administration for trandolapril, used in treating high blood pressure. It had surged to a high of Rs 600.
Federal Bank lost 3.25% to Rs 210.05 on reports that it is planning to enter wealth management and buying a stake in an asset management company (AMC). The bank is said to be looking for mergers and acquisitions opportunities. It is also planning a joint venture in West Asia to look after its business in the region.
Crew BOS Products gained 0.87% to Rs 231.90, as buying continued for the second day in a row today after it scheduled an extraordinary general meeting (EGM) on 8 January 2007, to consider allotment of up to 12.50 lakh convertible warrants, on a preferential basis, to promoters and investors, with an option to convert them into equity shares of Rs 10 each against one warrant at the exercise price of Rs 178. The board will also seek shareholders’ consent for raising $ 25 million in domestic/international markets through various routes.
Unichem Labs surged 4% to Rs 274.60, extending its recent upmove after the company said late last week it had acquired the balance 40% stake in its UK subsidiary -Niche Generics from a group of managers of Niche Generics. Prior to this acquisition, Unichem held a 60% majority stake in the said Niche Generics. Niche Generics, UK, is engaged in the business of product development, dossier filing and manufacturing pharmaceutical formulations for the European markets.
Rana Sugars jumped 4.44% to Rs 24.70 after the company said it expected its new sugar unit and power plant in northern India to add Rs 200 crore in revenue this year.
As per provisional data, FIIs were net sellers to the tune of Rs 369 crore on Monday (18 December), the day when Sensex had risen 116 points in volatile trade. Their net outflow was Rs 46 crore on Friday 15 December, the day when Sensex had risen 127 points.
FIIs were net buyers to the tune of Rs 307 crore in index-based futures on Monday. They were net sellers to the tune of Rs 26 crore in individual stock futures on that day.
US stocks fell on Monday as investors locked in profits after tumbling oil prices hurt energy shares such as Exxon Mobil Corp., overshadowing gains earlier in the session on news of at least $82 billion in corporate takeovers. The Dow Jones industrial average was down 4.25 points, or 0.03%, to end at 12,441.27. The Nasdaq Composite Index was down 21.63 points, or 0.88%, to close at 2,435.57.
Oil prices were steady on Tuesday as the market gauged the impact of its biggest slide in a month the day before. On Monday, prices dropped 1.9% as forecasts about warmer-than-normal U.S. weather countered last week's gains. It was the biggest dollar and percentage drop for the front-month contract since 16 November.
Tuesday, light sweet crude for January delivery dropped a penny to US$62.20 a barrel in midday Asian electronic trading on the New York Mercantile Exchange.