Market sees broad based sell-off

A fresh setback for global stocks along with disappointing economic data at home triggered a sharp slide on the domestic bourses. The barometer index, the S&P BSE Sensex, fell 586.65 points or 2.23% to settle at 25,696.44. The 50-unit CNX Nifty fell 185.45 points or 2.33% to settle at 7,785.85. The Sensex fell below the psychological 26,000 level. The Sensex hit its lowest closing level in more than a year. The Nifty hit its lowest closing level in more than 10 months. Banking and metal stocks led the decline in key benchmark indices. Stocks fell across the globe after disappointing manufacturing data in China.

Closer home, the broad market depicted weakness. There were more than three losers against every gainer on BSE. The BSE Mid-Cap index lost 1.96%. The BSE Small-Cap index shed 2.17%.

Metal shares edged lower after twin surveys showed China's manufacturing sector in the grip of its worst slump in several years.

The Sensex fell 586.65 points or 2.23% to settle at 25,696.44, its lowest closing level since 11 August 2014. The index lost 703.21 points at the day's low of 25,579.88 in mid-afternoon trade. The index fell 142.02 points at the day's high of 26,141.07 at the onset of the trading session.

The CNX Nifty fell 185.45 points or 2.33% to settle at 7,785.85, its lowest closing level since 17 October 2014 The index hit a low of 7,746.50 in intraday trade. The index hit a high of 7,929.10 in intraday trade.

The market breadth indicating the overall health of the market was quite weak. There were more than three losers against every gainer on BSE. 2,082 shares declined and 612 shares rose. A total of 89 shares were unchanged.

The BSE Mid-Cap index fell 210.59 points or 1.96% to settle at 10,523.83. The BSE Small-Cap index fell 237.89 points or 2.17% to settle at 10,733.38. The fall in both these indices was lower than the Sensex's decline in percentage terms.

The total turnover on BSE amounted to Rs 2519 crore, higher than turnover of Rs 2199.30 crore registered during the previous trading session.

Tata Motors fell 3.10% to Rs 329.60. Tata Motors' total sales fell 0.5% to 40,680 units in August 2015 over August 2014. Domestic sales declined 3% to 35,478 units in August 2015 over August 2014. Exports rose 16% to 5,202 units in August 2015 over August 2014. Sales of passenger cars rose 19% to 9,814 units in August 2015 over August 2014. In commercial vehicles segment, M&HCV sales jumped 31% to 12,017 units in August 2015 over August 2014. Sales of light and small commercial vehicles dropped 25% to 12,267 units in August 2015 over August 2014. This monthly sales data pertains to the standalone operations of Tata Motors. The company announced the monthly sales volume data after trading hours today, 1 September 2015.

Bank stocks declined. ICICI Bank shed 2.32% to Rs 271.65. State Bank of India (SBI) declined 3.24% to Rs 239.10. The Reserve Bank of India (RBI) after market hours yesterday, 31 August 2015, named SBI and ICICI Bank as domestic systemically important banks (D-SIBs). Under this framework, the additional Common Equity Tier 1 (CET1) requirements as a percentage of Risk Weighted Assets (RWAs) applicable to ICICI Bank is 0.2% while for State Bank of India (SBI) it is 0.6%. The additional Common Equity Tier 1 (CET1) requirements applicable to D-SIBs will be applicable from 1 April 2016 in a phased manner and would become fully effective from 1 April 2019. The additional CET1 requirement is in addition to the capital conservation buffer.

This is the first time that the RBI has named D-SIBs. The RBI will release the list of D-SIBs every year.

Among private bank stocks, Kotak Mahindra Bank (down 5.71%), Axis Bank (down 5.24%), Yes Bank (down 3.35%), Federal Bank (down 3.18%), IndusInd Bank (down 3.09%) and City Union Bank (down 2.8%), edged lower.

HDFC Bank lost 2.68% to Rs 1000.60 on reports the bank has slashed base rate by 35 basis points to 9.35% from 9.7% earlier. The base rate is the minimum lending rate charged by a bank.

Among PSU bank stocks, IDBI Bank (down 5.94%), Bank of India (down 5.38%), Union Bank of India (down 5.34%), UCO Bank (down 4.57%), Andhra Bank (down 4.37%), Syndicate Bank (down 4.1%), Allahabad Bank (down 3.96%), Dena Bank (down 3.76%), Punjab and Sind Bank (down 3.27%), Indian Bank (down 3.19%), United Bank of India (down 2.72%), Corporation Bank (down 2.51%), Vijaya Bank (down 2.35%), Central Bank of India (down 1.63%) and Bank of Maharashtra (down 1.29%) edged lower.

Canara Bank fell 6.12% to Rs 268.35 after the bank's board of directors approved reduction in the base rate by 10 basis points to 9.9% from 10% with effect from 3 September 2015. The announcement was made after market hours yesterday, 31 August 2015.

Bank of Baroda lost 6.53% to Rs 172.60 after the bank said it has fixed issue price at Rs 192.74 per share for preferential allotment of shares to the Government of India (GoI). GoI will infuse capital funds to the tune of Rs 1786 crore in Bank of Baroda through the preferential allotment of equity shares.

Punjab National Bank lost 6.94% to Rs 134.80 after global credit rating agency Fitch downgraded the bank's Viability Rating by one notch to 'bb, citing growing risk to the bank's capital position from its mounting stressed assets. Fitch believes that PNB's recovery could prove to be more protracted than other similar-sized peers because of large stressed assets.

Metal and mining shares edged lower after twin surveys showed China's manufacturing sector in the grip of its worst slump in several years. Steel Authority of India (down 6.59%), Hindalco Industries (down 5.18%), Jindal Steel & Power (down 4.64%), Tata Steel (down 3.93%), Hindustan Copper (down 3.85%), Vedanta (down 3.8%), Bhushan Steel (down 3.24%), JSW Steel (down 2.17%), Hindustan Zinc (down 1.1%) and NMDC (down 0.5%), edged lower. National Aluminium Company was unchanged at Rs 32.30. China is the world's largest consumer of steel, copper and aluminum.

The Sensex has fallen 1,802.98 points or 6.56% in this calendar year so far (till 1 September 2015). The Sensex has risen 398.02 points or 1.57% from a 52-week low of 25,298.42 hit on 25 August 2015. The Sensex is off 4,328.30 points or 14.42% from a record high of 30,024.74 hit on 4 March 2015.

India's gross domestic product (GDP) grew 7% in Q1 June 2015, slower than 7.5% expansion registered in Q4 March 2015, according to the data released by the government after trading hours yesterday, 31 August 2015. Another data showed slowdown in core sector growth to 1.1% in July 2015 from 3% growth in June 2015. Meanwhile, the outcome of a monthly survey showed slowdown in growth in India's manufacturing sector last month.

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