- 2 months ago
Indian equity benchmark indices opened significantly lower as a broad-based market sell-off pushed the Sensex down over 700 points, while the Nifty fell below the 23,800 mark and Nifty Bank slipped under 57,000. Key sectors including banking, IT, metals, financial services, and automobiles faced severe downward pressure, impacting major stocks such as Infosys, TCS, Wipro, Shriram Finance, and Mahindra & Mahindra. Brent crude oil prices surged toward 97 dollars per barrel, triggering selling pressure in crude-sensitive counters like InterGlobe Aviation, while Coal India and ONGC traded higher. Rising US bond yields, global debt market declines, and heightened West Asia geopolitical tensions fueled investor anxiety. Additionally, automobile exports for Maruti Suzuki and Hyundai Motor India encountered severe disruptions due to international shipping container shortages and cargo vessel scarcities. Meanwhile, multi-year high bond yields and rate hike expectations pressed precious metals lower, with MCX gold declining to 1.5 lakh rupees per 10 grams and MCX silver dropping to 2.26 lakh rupees per kilogram.
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NewsTranscript
00:00U.S. Meals Trader will look at how the markets have settled in the pre-open trade.
00:04It's a sea of red, what you're going to be witnessing in the mid-week trade today.
00:09Remember, it was the Cass effect that managed to put the Nifty up into the green
00:14towards the last point in the trade yesterday, towards its closing session.
00:18But more than feared, the Nifty could be opening even below 23,900-odd mark,
00:25almost a 200-point of a dip, 0.8% of a fall is what you're likely to see.
00:30The Nifty Bank, again, about 0.7% of a decline, closing in on the 57,000 mark is what
00:36you could see on the markets.
00:38It could be all the sectors that could open with a sharp cut on the markets.
00:42With the IT stocks, financial services, real estate also settling almost 1% lower.
00:48When you talk about the small caps and the mid-caps, almost a half-odd percent of a cut could
00:53be coming in there.
00:53Even on the Nifty, remains to be seen whether there will be any few stocks that will manage to pull
00:59up
01:00despite the kind of weakness that we are seeing.
01:02So why is the market indicating at a sea of red opening in the session today, just a few minutes
01:07from now?
01:08Well, the markets have opened up amidst three challenges.
01:12First of all, it's the Brent crude prices that have shot up above the $96 a mark.
01:18We're also seeing the global bonds also facing a sharp sell-off and, of course, the renewed tensions between U
01:25.S. and Iran.
01:26All of this is again casting a shadow on the stock markets.
01:30Remember, the U.S. markets closed with the third straight session of a dip coming in.
01:35Asian markets have sold off in the early morning trade.
01:38And now it's about the Indian markets that could be reflecting the same fear in the markets
01:43despite the domestic markets doing pretty well as indicated by the GDP figures as well.
01:49Let me also look at welcoming our guest on board.
01:52We have Gaurav Sharma from Globe Capital also joining in on the program with us
01:57to give us a sense of what to expect in the markets.
02:00Gaurav, good morning. Good to have you with us.
02:02But the markets, again, are looking at a sharp fear of now selling off even below $23,900.
02:09If we open below this level, what do you think could that open doors for further downside on the markets?
02:18Yes, Akshay, very good morning to you.
02:21Very certainly that whatever we are seeing as far as implied open is concerned
02:28is indicating towards a clear-cut breakdown now.
02:32A further slide towards $23,800, $23,600 is pretty much possible.
02:38All the factors are indicating towards a weaker markets, a day in red.
02:45Crude anywhere mounting above $97 mark will lead to a further upsurge towards $103, $105 mark.
02:55This is not at all a comfortable situation for the Indian equities.
03:00The resultant, we could see a further pullback in equities.
03:05Apart from this, HDFC Bank news is continuously dampening the sentiments.
03:10So we need to keep a close eye on all these developments, the bond markets, the crude oil, and the
03:17HDFC Bank as well.
03:19Absolutely. So that's something that will continue to be in the limelight today, viewers.
03:24Keep an eye out on the oil and gas stocks and all those sectors that are linked to the crude
03:30oil prices impact as well.
03:32So the oil and gas index is indicative of an opening about a half-odd percent lower.
03:37Let's also look at some stocks like aviation stocks, Indigo for that matter, paint-related stocks, Asian paints, Berger paints
03:45for that matter, tyre-related stocks as well.
03:48Those could be again hit.
03:49Kaurav, any suggestion of how would you approach some such stocks?
03:53We'll be watching Indigo very closely, Sashri.
03:56It is trading closer to its 200-period exponential moving average, which is a very important support, as well as
04:02the psychological 5,000 mark as well.
04:05A fall below this level will quickly take it towards 48 and 4,600 level.
04:12So very close eye on Indigo.
04:15This probably could be a short-sell opportunity.
04:19Absolutely.
04:20Let's also look at the auto space as a whole, viewers.
04:23India's auto exports are actually facing a fresh hurdle with shortage of vessels disrupting the shipments from key car makers,
04:29including Maruti and Hyundai.
04:31And the disruption is linked to the ongoing West Asia conflict and could persist for some time.
04:36For more details on this, let me go across to my colleague Karan Dhar, who's joining in with more details
04:40on the same.
04:41Karan, just from yesterday, we were celebrating the kind of numbers that were coming in from the auto basket.
04:46Talk about the kind of numbers domestically and even exports that were looking.
04:51But you're highlighting that there could be some impact as far as the exports are concerned for the largest car
04:57makers, Maruti and Hyundai, facing shortage of shipments.
05:01That's right, Sashri.
05:02Obviously, India's automobile exports are running into rough seas in August as vessel shortage triggered by the ongoing West Asia
05:10conflict has disrupted shipments.
05:12So remember, Maruti and Suzuki accounts for over 50% of India's passenger vehicle exports, while Hyundai Motor India accounts
05:20for around 20% of India's passenger vehicle exports.
05:22And both these car makers yesterday, in their monthly numbers, stated that they're facing disruptions in, they're not getting ships.
05:31They said there's no demand crunch, there's no issue with supply, but their cars are stuck at the ports and
05:39they're not able to ship from India to outside countries for exports.
05:42Because of the disruption in non-availability of ships.
05:47So it's a cause of concern because, you know, these shipments, auto-car shipments go to countries across the world,
05:57including to Latin America, which is very far from India.
05:59And there's a very long lead time.
06:02And these companies require…
06:04It's hot there, Karan. The markets have opened and I need to address the markets.
06:07There's a sharp fall right at the open viewers.
06:0923,823, 232 points lower as far as the Nifty is concerned right now.
06:15You're looking at, across the board, a sharp dip coming in.
06:191.3% lower for the Nifty IT index.
06:21Financial services over 1% lower.
06:23Mid-cap's about 1% cut.
06:25Metals down by about 1%.
06:27You're looking at at least 7 to 8 indices that are down by over 1%.
06:32On the Nifty, only two stocks are higher, viewers.
06:34Gold India and ONGC rest.
06:36All of the stocks are actually deep into the red as far as the market opening is concerned.
06:41You're looking at, of course, the Nifty Bank also below 57,000 mark as well at this point in time.
06:48Across the board, look at the advance decline ratio.
06:50Only 602 advances on the NSE vis-a-vis 1185 declines.
06:55That goes on to show that there is a 2 is to 1 ratio as far as the advance and
06:59the declines are concerned on the markets.
07:01And there is a pain that can be seen across the board.
07:04India Wix, by the way, is up by about 2 odd percent.
07:0711.7 is the level at which India Wix is currently trading at as well.
07:11On the Nifty, like I said, there are only two stocks into the green.
07:15But the big fall is coming in on names like Indigo.
07:18I pointed out that the oil-related stocks will be in focus.
07:21Indigo is down by 2.5%.
07:24You also have some banking finance names like Sriram Finance that's down in trade.
07:28IT names, Inputsist, TCS, Wipro, all of them are down in the trade as well.
07:32From the auto pack, Mahindra and Mahindra is also taking a beating.
07:36HDFC Bank continues to reel under pressure now, closing in on the 700 mark as well as far as the
07:42stocks there are concerned.
07:43Let me look at the big laggards in the broader markets.
07:46Do we have some big substantial moves there that we can point out to our viewers?
07:51Not too many that we can point out.
07:53Let's talk about some of the winners that are managing to buck the trend in an otherwise very weak setup
07:59of trade that we are looking at.
08:01Tribuwan, Das, Bheemji, Zaveri, 7% higher.
08:04Remember, that's coming after a 20% circuit yesterday.
08:07This is after changing of hands as far as the promoters are concerned.
08:11GRT is going to be taking over.
08:13Then you also have some other stocks that are moving up.
08:16Smaller names that are actually doing well.
08:18Century Inca is up by 12%.
08:20Then you also have some names like EMS Limited that's up and about in trade.
08:26We are also looking at very few names that I can't really talk about at this point in time.
08:31But that's how the markets have opened.
08:33I'll quickly take a word from Gaurav.
08:35Gaurav, how do you see the market opening?
08:3923,850 has been taken out.
08:41Almost a 1% dip coming in.
08:43Across the board, there is a broad-based sell-off that we are witnessing.
08:47What would you do in such a market?
08:50There are two points where I want to focus at.
08:53Firstly, it was a deep dive, which was pretty much expected.
08:57What was not expected is the market extending the decline just right after the opening.
09:03Because a deep flight followed by an extension is not at all a good sign.
09:06Yes, we are expecting a cut in the stocks which use oil as their raw material, something like Indigo Aviation
09:15stocks, maybe paint companies, maybe autos directly.
09:21So, you know, they are witnessing steep sell-off.
09:25One more thing here, Sanchi.
09:27The kind of sales figures that majority of Indian companies have posted so far is pretty much encouraging.
09:34I think this particular decline should be utilized as a buy or accumulate opportunity.
09:40Because whatever speed breakers that we may see in the supply chain or logistics will certainly fade out.
09:49But the sales have already been booked.
09:51The money has been realized.
09:53So, that will be reflected in the upcoming quarterly numbers.
09:56And I think the sales has to go on.
10:01From the past couple of months, this is fourth, fifth consecutive month, what we are seeing, that these auto companies,
10:07these automakers are coming up with robust numbers.
10:10So far, to my knowledge, it is only Aisha Motor that has reported a dismal set of numbers.
10:17And that is also 11% double-digit mark.
10:21That's the least.
10:22And we have companies reporting even 50% hikes so far.
10:27So, I think let's focus on the bigger picture here.
10:30This decline should be utilized as a buying opportunity for a medium to long-term perspective.
10:35We may witness some kind of leap, some kind of profit taking due to the ongoing disruptions in the supply
10:42chain that will eventually fade out.
10:45Right.
10:45Let me go across to Karan once again and, you know, let's talk about the exports that have been hit
10:51so far because of the, you know, shipments that have been reduced because of the ongoing U.S.-Iran tensions.
10:58And with these renewed tensions now, Karan, everybody would want to know whether this is a prolonged picture for such
11:04large car makers like Maruti and Hyundai.
11:06There are fresh tensions emerging.
11:08So, will there be a prolonged export hit that we can expect for the rest of the months of FY27
11:14as well?
11:16Sakshi, yesterday during the media conference call, Maruti's top executives, they said that the problem may continue for a while.
11:24Remember, these are international shipping liners.
11:27You know, India doesn't have its own, you know, these shipping liners.
11:31So, these are international shipping liners and they are not available for them.
11:36They are just not available because they have the goods to export, but they have the cars stuck at the
11:41ports for export, but these ships are not available.
11:44And two big car makers facing this issue is a very big thing.
11:49And we don't know yet whether, you know, this is not reflected in two-wheeler exports yet.
11:54We will have to check that later.
11:57But as far as car exports are concerned, this certainly was an issue in August and it may continue for
12:03a while.
12:04But the good part is companies like Maruti and Suzuki are diversified across 120 markets in the world.
12:10So, they have that kind of legal room to, you know, export their cars anywhere in the world.
12:17And they, but they also have a significant presence in Latin America, which, you know, again, requires longer lead times
12:23and ships there are required for weeks because it's a very long journey.
12:28And so, their top executives said that it's a VUCA world and they are prepared for it.
12:34You know, as everybody these days is facing, you know, either geopolitical issues and in this world, everything is VUCA.
12:42So, that's mostly it.
12:45And, you know, Maruti exported more vehicles than, you know, 17 manufacturers, 17 other manufacturers in India combined.
12:57So, they are pretty bullish on exports.
13:00And meanwhile, Hyundai also is facing a similar issue.
13:03They were also affected by logistical constraints due to the conflict and non-availability of ships.
13:10But for two-wheelers, we'll have to wait for this month because for the August exports are mostly, you know,
13:18have grown.
13:19So, that is not reflected there.
13:21So, back to you.
13:23Absolutely, Karan.
13:24Thanks a lot for getting us all of those details.
13:26We'll, of course, also get more details from you as far as the two-wheelers position is concerned and whether
13:33the exports there also are facing any hurdles because of these ship shortages that are being faced by the large
13:39car makers there because of the ongoing crisis in West Asia, at least at this point in time.
13:45But breaking news coming in on your screens, viewers, the rupee is currently trading at around 94.89 per dollar.
13:52This is vis-a-vis 94.95 per dollar as we have seen.
13:56So, some more weakness merging as far as the rupee is concerned and some more strength that we have seen
14:02as far as the rupee is concerned, about 6 pese in early trade.
14:06So, that's something which is positive.
14:08But the CEN6 is down by over 700 points and the NIFTY is declining by 260 points now.
14:1523,800 has been tested on the lower side as well.
14:19Karan, I think the picture is getting even more worse as we speak.
14:23Just about within 10 minutes of trade, we have seen a 260 point of a cut coming in onto the
14:29NIFTY.
14:30You know, so far in the last couple of months, the markets were hovering in a range.
14:33Yes, they were not falling too much below.
14:36They were also not being able to rise or cross the resilience of 24,400.
14:41But this fresh breach of 23,800, how would you deal with that?
14:46And how much more downside do you see from here?
14:50These are not at all good figures to look at, not at all encouraging.
14:55We were comforted by the fact earlier that even we have a depleting NIFTY index,
15:00but at least to broader markets, the mid and small cap space were performing well.
15:05But the shine seems to be losing out in today's trade.
15:10The level that has broken down has opened the gates for the further slide towards 23,600 odd levels.
15:16I advise traders, short-term traders, to maintain utmost caution.
15:21We may see a further slide even today or by tomorrow.
15:25I repeat, a rise in crude oil Brent prices beyond 97 is not at all a healthy sign.
15:32It will quickly take the prices closer to 103, 105.
15:37These are not at all comforting numbers and will certainly have a negative impact on Indian equities.
15:44And the rate sensitives will certainly be impacted by then.
15:49The fears of inflation will once again completely overshadow markets.
15:56So, the entire scenario that was left behind will come forward before us once again.
16:02Absolutely.
16:02Let's also look at how the precious metals are trading this morning, viewers.
16:06There is a weakness that we can see on gold and silver as well this morning.
16:10MCX Gold has slipped 2,000 rupees and is now trading at 1.5 lakh rupees per 10 grams.
16:18MCX Silver has dropped by 3,700 rupees a kilo.
16:22Now to trade at 2.26 lakh rupees a kilogram.
16:26Again, fresh impact that is coming in.
16:28Remember from last couple of sessions because of the indications of a U.S. Fed rate hike coming in
16:35as some of the indications are already pointing out too.
16:39That has put a fresh pressure on precious gold and silver metals as well.
16:44And you're seeing a sharp drop.
16:46Remember, this also comes in right ahead of the festive season in India and the wedding season in India.
16:52So, for the consumers, this will be a good news.
16:54That gold prices are now trading at 1.5 lakh rupees per 10 grams.
16:58Silver is now closing in on 2.2 lakh rupees per kilogram as well.
17:03But this is a clear impact again of what we are seeing happening externally too.
17:09Gaurav, let me also take a view from you.
17:12Gold, silver on the declining side.
17:14What's your advice to all the investors thereof?
17:17And secondly, we are seeing constant uptick in the bond yields globally as well.
17:23Multi-year highs for these bond yields.
17:25What are you looking at on these asset classes, the impact that will happen of the fund flows?
17:31The financial markets are a very beautiful place to be, and they are interrelated.
17:36When the bond prices go up, they have a credible impact on other asset classes.
17:43The reason behind bond prices going up is rising inflation, as you've already said.
17:49U.S. bond prices are at multi-year high.
17:53The 30-year bond has peaked out after 2007 mark.
17:58So, this will have an impact, and this is having impact on equities across the globe.
18:05The bond and the gold prices do have an inverse relationship.
18:09Apart from this, the Indian government is also considering a further cut in the excise duty.
18:16This may also have a negative impact on gold prices.
18:20But this actually gives us an opportunity to look at silver now.
18:24I think silver will not be falling much.
18:27The direct negative impact of these developments will be on gold prices, and that's what exactly we are witnessing.
18:35I think silver is a much sweeter place to be in.
18:38So, the fall will be lesser.
18:42I don't say that silver will bounce back sooner, but certainly the fall will be lesser than gold when compared
18:49in the near term, at least.
18:52But from a longer-term view, at least a six-month view, we remain very much bullish on gold prices.
18:57Any decline from these levels, one should simply go out and buy it.
19:02They will bounce back sharply.
19:04All right, okay, Gaurav, well, thank you then for being with us on this special edition and sharing with us
19:10all your thoughts there.
19:11As far as the markets are concerned and what to expect going forward from here,
19:15and how to look at all these moving parts of the bond yields at multi-year highs, precious metals falling,
19:22and the renewed tensions impacting crude oil prices also to inch up higher, closer to $97 a barrel.
19:29All of this is important to see how the markets will pan out.
19:33Currently, we did see the markets and the Nifty slip below the 23,800 mark on an intraday basis.
19:40235 point of a fall still remains, and we will, of course, keep tracking for you for the rest of
19:45the session on business today.
19:46The closer, finer details of the market moves, and of course, stay tuned with us on India Today at 3
19:52.05 p.m.
19:53when we come back for the closing edition as well.