Tuesday 25 August 2015

Sensex sinks 300 pts, Nifty below 7850 on China volatility -- 26 Aug 2015

Vedanta, BHEL, Tata Motors, Hero Motocorp, Infosys and HCL Tech fell 2.5-3.6 percent. However, Wipro, Tata Power and Asian Paints gained more than half a percent.

                                         
The market retreated badly in early trade Wednesday following weakness on Wall Street and volatility in China despite rate cut by People's Bank of China.The Sensex fell 337.22 points or 1.30 percent to 25695.16 and the Nifty lost 87.65 points or 1.11 percent to 7793.05. About 246 shares have advanced, 661 shares declined, and 35 shares are unchanged on the BSE. Vedanta, BHEL, Tata Motors, Hero Motocorp, Infosys and HCL Tech fell 2.5-3.6 percent. However, Wipro, Tata Power and Asian Paints gained more than half a percent. The Indian rupee has opened lower by 12 paise at 66.22 per dollar on Wednesday against previous close of 66.10. Ashutosh Raina of HDFC Bank said the People's Bank of China (PBoC) reduced the benchmark interest rates by 25 bps and RRR by 50 bps to stem the turbulence in the Chinese and global markets. Some smooth action by the RBI to support the currency and limit the volatility helped the USD-INR pair to close near 66/dollar figure, he added. He expects the USD-INR pair to trade in the 65.50-66.50/dollar range in the short term. On the global front, Asian markets were mixed in trade today. China's Shanghai remained recovered to trade marginally in green despite rate cut by People's Bank of China on Tuesday evening. China's central bank has lowered its one-year lending rate by 25 basis points to 4.6 percent effective August 26. It also cuts deposit rate by 25 bps to 1.75 percent effective August 26, while cutting banks' reserve requirement ratio by 50 bps effective September 6. However, Wall Street closed lower in a late plunge overnight. Dollar gained against a basket of major currencies, recovered from seven-month lows against the safe-haven yen and euro.

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