Sensex Opens Flat; Metal & IT Stocks Drag

Wed, 4 Jul 09:30 am

   Previous Close   

   Pre-Open   

   12:30 pm   

   Closing   

Asian share markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.7% while the Hang Seng is down 1.1%. The Shanghai Composite is trading down by 0.8%. Wall Street dipped on Tuesday, weighed down by Apple, Facebook and other technology stocks.

Back home, India share markets opened the day on a flat note. The BSE Sensex is trading up by 12 points while the NSE Nifty is trading up by 1 point. The BSE Mid Cap index and BSE Small Cap index opened down by 0.4% & 0.1% respectively.

Sectoral indices opened the day on a mixed note with power stocks and healthcare stocks witnessing maximum buying interest. While, metal stocks & IT stocks opened the day in red.

The market is facing a lot of selling pressure.

Foreign institutional investors (FIIs) have taken the lead in dumping stocks.

In 2018 till date, FIIs have pulled out nearly Rs 71 billion from the Indian stocks. Nevertheless, domestic institutional investors (DIIs) have supported the markets so far.

FIIs Pulling Out Money from the Indian Stock Market

The main reason is rising interest rates in the US. This tempts large foreign funds to move their money to the US.

This outflow impacts all emerging markets including India. We are also facing a weak rupee and high crude oil.

In the latest development, the rupee yesterday made a strong comeback against the US currency after taking a hammering yesterday, recouping by a steep 23 paise to end at 68.57 on fresh dollar selling by exporters and corporates.

Heavy intervention by the Reserve Bank along with positive trend in local equity markets largely supported the home currency.

Earlier, extending its bearish stance, the domestic unit resumed lower at 68.91 from the last close of 68.8 at the interbank foreign exchange (forex) market.

It hit a low of 68.97 in early deals moving in sync with the weakening of other currencies in the region and also heavily weighed down by steady capital outflows.

Note that the rupee has been witnessing selling pressure against the US dollar since the start of this calendar year.

What does the fall in rupee mean for the Indian economy?

A depreciation in rupee means importers buying goods and services at a higher rate that earlier. This doesn't bode well for a developing economy that relies heavily on imports.

Also, India imports most of its oil requirements. So, a fall in rupee leads to a consequent rise in the import bill. The depreciation of the rupee will also add to crude oil's rising cost.

On the corporate side, companies who have taken foreign loans from abroad will be impacted. The repayment obligations in terms of principal and interest will rise, leading to a dent in the cash flows and financials.

Further, companies who import a majority of their raw material requirements will get impacted provided they have not hedged their foreign currency exposure.

Looking at the brighter side, rupee depreciation brings a cheer on the exports front.

A depreciating rupee will provide a much-needed cushion to falling exports. However, a falling rupee will not be the only factor to boost exports. There are certain structural issues too which the government needs to address.

Ankit Shah has explained how the depreciation in rupee is linked to foreign investor outflows and forex reserves in one of his editions of Equitymaster Insider. You can read the entire article here (requires subscription).

The rupee is currently trading at 68.69 to the US$.

Moving on to the news from Tata group. As per an article in a leading financial daily, Tata Group is evaluating a proposal to integrate its food and beverage businesses into a single company.

The Mumbai-headquartered group is considering separating the salt and branded lentils businesses of Tata Chemicals Ltd. and folding them into Tata Global Beverages Ltd.

It's also weighing merging Tata Coffee Ltd., which owns coffee plantations and tea gardens, with the beverages company, and entering dairy.

The proposal is part of chairman Natarajan Chandrasekaran's larger strategy to combine related businesses under a single umbrella to increase efficiency and simplify the conglomerate, which includes more than 100 independent operating companies.

In April, the Tata group said it will create a single entity called Tata Aerospace & Defence by merging all allied businesses.

Reportedly, the rationale behind folding food and beverage businesses into a single company is nothing but de-risking.

The group is weighing different options and a final decision hasn't been made about the units that will be merged and into which company. A special task force has been formed and has made presentations to the board of Tata Sons Ltd., the group's holding company.

Tata stocks opened the day on a mixed note with Tata Investment Corporation and Tata Sponge leading the pack of gainers.

To get more updates on share market, click here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Top Gainers TodayTop Gainers over 1-WeekTop Gainers over 1-MonthTop Gainers over 1-YearTop Gainers over 3-YrsTop Gainers over 5-YrsTop Losers TodayTop Losers over 1-WeekTop Losers over 1-MonthTop Losers over 1-YearTop Losers over 3-YrsTop Losers over 5-YrsOnly BuyersOnly SellersMost Active StocksMost Popular Stocks52 Week High Stocks52 Week Low Stocks

INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

10 results 25 results 50 results 100 results All results

Indian Share Market Update: Top Gainers and Losers