Chinese slide, Greek crisis subdue markets; Sensex sheds 484 points

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SME Times News Bureau | 08 Jul, 2015
The continuous slide in the Chinese stock markets and the stalemate in the Greece debt talks dampened investor sentiments, leading to a barometer index of the Indian equity markets to tank by 484 points on Wednesday.

Other triggers for the sell-off include the weekly data on crude oil invetories which impacts the international prices and the US Fed's FOMC (Federal Open Market Committee) minutes which are both scheduled to be released later today.

The benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed 483.97 points or 1.72 percent down during Wednesday's trade session.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed deep in the red. It plunged 147.75 points or 1.74 percent at 8,363.05 points.

The Sensex, which opened at 28,031.45 points, closed at 27,687.72 points -- down 483.97 points or 1.72 percent from the previous day's close at 28,171.69 points.

The Sensex touched a high of 28,031.45 points and a low of 27,635.78 points in the intra-day trade.

Analysts said the downward trajectory in the Indian markets was due to the spill-over effect from the continuous slide in the Chinese stocks markets and the stalemate regarding the Greek debt talks.

"The continuous slide in the Chinese markets since sometime now has caused a downfall of nearly 40 percent. The inability of the government, fund houses and brokerage firms in arresting the fall has caused international panic," Anand James, co-head, technical research desk, Geojit BNP Paribas, said.

"Indian markets have been anxious about the Chinese stock markets crash. Coupled with this, the stalemate in the Greek debt crisis has subdued investor confidence here," James said.

He elaborated that the strong macro-economic fundamentals in terms of growth, inflation, current account and fiscal deficits provides a reasonable degree of resilience to the Indian financial system.

He predicted that the next major triggers for the markets will be the upcoming first quarter results and the key macro-economic data scheduled to be released on Friday.

"There is a hope that the first quarter (Q1) numbers due to be released soon will be better than the Q4 of 2014-15. Factors like lower inflation, easing of monetary policy and stable rupee are expected to be translated into better Q1 numbers," James added.

The first major result to come out will be of Tata Consultancy Services (TCS) on July 9.

Gaurav Jain, director with Hem Securities, said that the global sell-off across all asset classes triggered a sharp fall at the Indian bourses.

"Sharp sell-off in crude and metals was witnessed due to the worries over China. Investors seem to unwind their position ahead of key outcomes on Greece crisis, US FOMC minutes which are scheduled to be released later today," Jain said.

During Wednesday's intra-day trade, all 12 sector-based indices of the BSE closed the day's trade in the red.

The S&P BSE automobile, bank, metal, information technology (IT), oil and gas, healthcare, capital goods, fast moving consumer goods (FMCG), consumer durables and technology, entertainment and media (TECK) stocks came under intense selling pressure.

The S&P BSE automobile index plunged by 424.94 points, bank index crashed by 365.63 points, metal index plummeted by 357.35 points, IT index contracted by 155.43 points, and oil and gas index receded by 149.23 points.

The S&P BSE healthcare index fell by 121.99 points, followed by capital goods index which decreased by 88.45 points, FMCG index which declined by 76.29 points, consumer durables index edged-lower by 74.49 points and TECK index was down by 72.93 points.

The major Sensex gainer during Wednesday's trade was: Hindustan Unilever, up 0.04 percent at Rs.924.

The major Sensex losers were: Vedanta, down 7.85 percent at Rs.146.10; Tata Motors, down 6.17 percent at Rs.405.15; Hindalco Industries, down 5.13 percent at Rs.101.75; Tata Steel, down 4.72 percent at Rs.283.40; and HDFC, down 3.54 percent at Rs.1,290.05.

Among the Asian markets, Japan's Nikkei was down by 3.14 percent, China's Shanghai Composite Index went down by 6.14 percent, and Hong Kong's Hang Seng receded by 5.84 percent.

In Europe, the London FTSE 100 index was up by 0.63 percent, the French CAC 40 was higher by 0.73 percent and Germany's DAX Index gained by 0.47 percent at the closing bell Mumbai.