The market declined for the third straight day on Thursday, dragged by metal, auto and banks shares. Trading was volatile on account of weekly expiry of options on the National Stock Exchange. The Sensex breached the 37,000 level while the Nifty ended below the 10,800 mark.
The 30-unit BSE Sensex slumped 587.44 points or 1.59% to 36,472.93. The Nifty 50 index fell 180.95 points or 1.67% to 10,737.75.
The Nifty has fallen 316.15 points, or 2.86% in three consecutive trading sessions.
Investor sentiment was spoiled after Chief Economic Adviser Krishnamurthy Subramanian virtually ruled out a stimulus package from the government. Subramanian on Thursday said the Indian economy does not need a fiscal stimulus to tackle the ongoing economic slowdown.
Speaking at the Hero Mindmine Summit that brings together industry and government to discuss economic policy, Subramanian said policymakers need to be careful while deciding on any fiscal stimulus as a way to boost economic growth. He emphasised that the government is not expected to intervene every time when some sectors go through sunset phases.
The broader market saw intense selling. The S&P BSE Mid-Cap index fell 1.35%. The S&P BSE Small-Cap index fell 2.19%.
Losers outpaced gainers. On the BSE, 527 shares rose and 1945 shares fell. A total of 125 shares were unchanged.
Overseas, European stocks slipped Thursday after the widely watched 2-year/10-year US yield curve inverted for the second time in two weeks.
The yield curve, often seen as a precursor to a recession, flattened and then briefly inverted Wednesday after the release of minutes from the latest meeting of the US Federal Reserve's Federal Open Market Committee (FOMC). The minutes showed that Fed policymakers were keen to reiterate intentions that the central bank's latest cut to interest rates was a midcycle adjustment, sparking market fears that the Fed will not act aggressively enough.
Markets worldwide keenly awaited the US Federal Reserve chair's speech at a global central bankers' conclave at Jackson Hole on Friday, for clues on future U.S. interest rate cuts.
Most Asian indices ended lower with Hong Kong's Hang Seng index flashing a long-term bear market signal. Japanese manufacturing activity shrank for a fourth straight month in August, a preliminary business survey showed on Thursday. The Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) rose to a seasonally adjusted 49.5 from a final 49.4 in the previous month, but stayed below the 50 threshold that separates contraction from expansion for a fourth month.
Back home, HDFC twins declined. HDFC Bank fell 2.35% to Rs 2173.75. HDFC declined 2.49% to Rs 2014.85.
Among other index majors, ICICI Bank fell 3.17% to Rs 399.15. Reliance Industries fell 1.91% to Rs 1246.50.
Tech Mahindra (up 1.54%), Dr. Reddy's Laboratories (up 1.06%), TCS (up 1.33%), Hindustan Unilever (up 1.03%) and HCL Technologies (up 0.58%) bucked weak market trend.
Yes Bank slumped 13.91% to Rs 56.30, extending fall for third straight day triggered by a disclosure regarding irregularities and unauthorised transactions at CG Power and Industrial Solution. As on 30 June 2019, Yes Bank held 12.79% stake in CG Power. The scrip hit its 52-week low at Rs 60.10 today.
Shares of Yes bank have fallen 26.60% in three trading sessions from its close of Rs 76.70 on Monday, 19 August 2019.
CG Power and Industrial Solutions hit a lower circuit for the third straight day. The stock was down 9.75% at Rs 10.65. CG Power announced before trading hours on Tuesday, that an internal probe of the company had uncovered several irregularities in the financial statements of the company.
Following the disclosure, the company's shares hit a lower circuit limit of 20% to end at Rs 14.75 on Tuesday. The stock plunged 42.12% in three trading sessions from its close of Rs 18.40 on Monday, 19 August 2019.
Tata Motors lost 4.14% to Rs 107.65, extending yesterday's 9.29% slump triggered by China's Geely Automobile Holdings announcing on Wednesday that its first-half net profit declined 40% amid a sustained downturn in the world's biggest auto market, and it forecast an uncertain outlook for vehicle demand for the rest of the year. The group is China's highest profile car maker globally, due to its investments in Volvo and Daimler. China is a big market for Tata Motors.
Coffee Day Enterprises hit a 5% upper circuit to Rs 76.40 rising for fourth straight session. The stock surged 21.36% in four trading sessions from a recent closing low of Rs 62.95 on 16 August 2019.
The rally was triggered by rumors that ITC may purchase stake in Coffee Day Enterprises. However, ITC clarified after the market hours yesterday, 21 August 2019, that on an ongoing basis it receives enquiries from market participants which are suitably evaluated. One such enquiry was also received from an intermediary on Cafe Coffee Day. However, no progress has been made on the matter.
ITC fell 0.62% to Rs 240.10.
Granules India fell 3.28%. The drug company announced that US FDA has completed inspection of the facility of Granules Pharmaceuticals Inc., a wholly-owned foreign subsidiary of the company located in Chantilly, Virginia, USA on 21 August 2019 with two minor observations. This is a pre-approval inspection for seven products filed from this facility. The company added that its subsidiary will respond to these observations within the stipulated time period.
NMDC fell 8.81% to Rs 78.65. The company informed today that it filed revision petition on 19 August 2019, before Mines Tribunal challenging the order letter of Govt. of Karnataka withdrawing the extension of Mining Lease of Donimalai Iron Ore Mine for a period of 20 years with effect from November 2018 to November 2038. The company added that Mines Tribunal (Central Government) has issued a stay order against decision of Karnataka Government. The said stay order would prohibit Government of Karnataka to take any further action regarding mining lease or initiate auction process of Donimalai mine.
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