Markets slump over 500 points in late trades, financials weigh

Markets extended losses and were over 2% down in late trades on Tuesday, amid a weakening rupee, weighed down by selling pressure in financials and index heavyweights.

At 2:30PM, the Sensex was down 433 points or 2.2% at 18,749 and the Nifty was down 134 points or 2.3% at 5,551.

Asian markets outside Japan slipped, after dismal first-half earnings from HSBC dragged Hong Kong's Hang Seng Index sharply lower.  The Hang Seng was down 1.3% and the Straits Times eased 0.8%. Meanwhile, the Nikkei ended up 1% and the Shanghai Composite gained 0.5%. Most other indices in the region were trading lower.

European markets were trading flat on Tuesday. The CAC was trading with a positive bias while the DAX and FTSE were trading mixed with a negative bias.

The rupee weakened further against the US dollar and was down 77 paise at Rs 61.65.

The recent measures by the RBI  one would think were enough to contain the falling rupee but the plunge has only gotten deeper.

Meanwhile, the finance ministry and the Reserve Bank of India (RBI) will discuss possible measures to manage the situation.

The sub-committee of Financial Stability Development Council (FSDC) will meet in Mumbai tomorrow to assess the impact of liquidity tightening steps taken by the central bank in the last few weeks. The meet will discuss further measures to arrest fall of the rupee.

The BSE Consumer Durables index was the top loser among the sector indices down 5.6% followed by Realty, Bankex, Metal, Capital Goods, Oil and Gas, Power, FMCG and Healthcare indices down 0.9-3.8% each.

Financials were impacted by the recent liquidity tightening measures by the RBI and rate hikes on the back of a weakening rupee. HDFC Bank and ICICI Bank were among the top Sensex losers down over 3.5% each while HDFC was down 2.6%.

Among the index heavyweights Reliance Ind lost 1.7% and Infosys slipped 1.3%.

Bajaj Auto was down 4% amid the ongoing workers' strike at its Pune plant.

Tata Power slumped nearly 12% after the company posted an unexpected net loss of Rs 115 crore in the April-June quarter, hit by higher finance costs and foreign exchange losses.
Analysts had forecast a net profit of Rs 264 billion rupees compared with Rs 146 crore in the same period a year ago.

Other Sensex losers include, Bharti Airtel, ITC, L&T, ONGC, and Hindustan Unilever.

Ambuja Cements is up 2.6% at Rs 182, extending its 5% rally in past two days on BSE, amid reports that the market regulator the Securities and Exchange Board of India (Sebi) is examining the Holcim deal with respect to rights of minority shareholders.The BSE benchmark index S&P BSE Sensex has declined 2% in past three trading sessions.

In the broader market, the BSE Mid-cap and Small-Cap indices were down 1.6-2.5% each.

Market breadth continued to remain weak with 1,576 losers and 573 gainers on the BSE.