Sensex falls 450 points as oil sparks global equity sell-off - Livemint

At 10:30am, the 30-share S&P BSE Sensex was down 2.02%, or 545 points, to 27,290 points. Photo: Mint

Mumbai: India’s equity markets fell over 2% on Tuesday morning, their biggest decline since 3 September 2013, following sell-offs in global markets due to the fall in crude oil prices and political uncertainty in Greece.

At 10:30am, the 30-share S&P BSE Sensex was down 2.02%, or 545 points, to 27,290 points, while the 50-share CNX Nifty of the National Stock Exchange (NSE) declined 2.01%, or 167 points, to 8,209.02 points.

In intra-day trade, the Sensex fell as much as 2.2%, or 612.15 points, to 27,230.17, while Nifty fell as much as 2.2%, or 181.10 points, to 8,197.30.

Brent crude oil suffered a 1.8% drop on Monday to $55.42 per barrel, a fresh five-and-a-half-year low. Since a recent peak in June, prices of international benchmark crude have fallen 51.8% due to concerns of slowing demand coupled with a glut of global supply. There are fears that Greece might be forced out of the euro zone if a left-wing party, which has vowed to end austerity measures and erase a big portion of its debt, wins in 25 January elections as widely expected, Reuters reported.

All the Sensex stocks were trading lower. Among the losers, Oil and Natural Gas Corp. Ltd (ONGC) fell 3.6% to Rs.340.60, Tata Motors Ltd was down 3.5% to Rs.505.70, Hindalco Industries Ltd 3.1% to Rs.152.20, while Sesa Sterlite Ltd 2.8% to Rs.213.60.

All the sectoral indices on BSE were trading in the red. The metal, oil and gas and realty were top losers, down 2.3% each, followed by auto, power, healthcare, IT and capital goods which were down 2% each.

“I think the damage in the markets is largely due to the sharp fall in crude oil prices,” said Deven Choksey, managing director & chief executive officer of KR Choksey Shares & Securities Pvt. Ltd

“Global firms having exposure to various asset classes are facing collateral damages and are selling basket of assets without considering the merits,” added Choksey.

The market breadth was negative, with 441 advances against 1,669 declines.

Shares of upstream oil companies fell as investors feared that fall in international crude oil prices will affect revenues. Cairn India Ltd fell 2.7% to Rs.237.70, Oil and Natural Gas Corp. Ltd (ONGC) 2.2% to Rs.345.55, Reliance Industries Ltd 1.5% to Rs.864.40 and Gail India Ltd 1.6% to Rs.439.60.

Jubilant Life Sciences Ltd rose 9% to Rs.152.30 after the company said it has received Abbreviated New Drug Application (ANDA) final approval from the US Food and Drug Administration (US FDA) for Mycophenolate Mofetil USP in strengths of 250 mg capsules and 500 mg tablets (from its US subsidiary Jubilant Cadista Pharmaceuticals Inc.).

IRB Infrastructure Developers Ltd fell 3.1% to Rs.237.20 after the company said the Central Bureau of Investigation (CBI) has conducted searches across 21 locations and two cities in a case against entities related to IRB Infrastructure.

SpiceJet Ltd fell 6.3% to Rs.16.35 after Mint reported that banks are hesitant despite the aviation ministry asking them to lend as much as Rs.600 crore against guarantees by the promoters. However, Jet Airways India Ltd rose 3.8% to Rs.444.80.

Prime Minister Narendra Modi on Monday chose the ordinance route to allow the auction of iron ore and other minerals, the eighth time the seven-month-old government used executive powers to push through a key decision, ignoring criticism that it is bypassing Parliament.

The cabinet on Monday also cleared the Telecom Commission’s recommendations on spectrum auction that is expected to begin next month, the government said in a statement.

Most public sector bank unions have called for a one-day strike on 7 January and four days from 21 January demanding a wage hike pending since November 2012.

The HSBC services and composite PMI data, compiled by Markit, for December will be released at 10.30am on Tuesday. The services and composite PMI stood at 52.6 and 53.6, respectively, in November.

In 2014, the Sensex gained 29.42%, while foreign institutional investors bought a net of $16.03 billion from local equity markets and $26.35 billion from the debt market.

Asian shares tumbled on Tuesday as sliding oil prices and political uncertainty in Greece forced investors out of risk assets and into the safety of government bonds, Reuters reported. Hong Kong’s Hang Seng fell 1.4% and China’s Shanghai Composite was down 1%, while Japan’s Nikkei Stock Average dropped 2.7%.

Overnight, US stocks fell with energy shares leading the decline as global economic concerns were compounded by swooning oil prices, Reuters reported. The Dow Jones Industrial Average was down 1.9%, Nasdaq Composite 1.6% and S&P 500 1.8%.