Market nosedives on China woes, Nifty falls 2%

Market Nosedives: It has been an unfortunate day for the Indian markets as the benchmark indices like Nifty and Sensex which opened mildly positive today crashed down like a house of cards but the time the markets closed. The indices traded in a tight range throughout the first half of the session. Also with the hopes of the rate cut by BRI on 29th Sept, Nifty remained above the close of yesterday. But in the late afternoon, a turnaround was witnessed in the late afternoon. NIfty fell from the level of 7980 at 1PM to 7797 at 3PM.

Why the market crashed: Sentiments were weighed down by statement from Asian Development Bank (ADB) which stated that growth in Asia will be hurt by slowdown in China’s economy. Fears of global growth led to sharp selling pressure across the Asian and European markets, thus triggering a sharp sell-off in Indian markets. Moreover, depreciation in Indian too dampened the sentiments. The rupee was trading at 65.92 per dollar compared to previous close of 65.74 per dollar.
The sectors were in all in Red: None of the sectors ended in positive. The sector which fell the most was CNX METAL(-4.23%) followed by CNX PSU BANK(-3.19%), BANK NIFTY(-2.92%) and CNX FINANCE(-2.84%).  The sector which fell the least was CNX IT(-0.16%) and CNX PHARMA(-0.34%). Amongst the prominent stocks, there was only one gainer with minimal gains of 0.3% in WIPRO. The stocks which fell the most today are HINDALCO(-6.66%), VEDL(-6.25%), COALINDIA(-5.6%), TATAMOTORS(-5.03%) and YESBANK(-4.93%).

Ashok Leyland to list its financing arm–  Ashok Leyland,India’s second-largest commercial vehicle maker, has plans to list its financing arm in the second half of next year and could raise up to 6.5 billion rupees ($99 million). Ashok Leyland, part of the Hinduja Group, is seeking a valuation of 40 billion rupees for Hinduja Leyland Finance Ltd and has appointed five bankers to manage the issue. Hinduja Leyland Finance provides loans to buy utility vehicles, tractors, cars and two wheelers in India’s semi-urban and rural areas. Private equity firm Everstone Group, which has a 15% stake in the company, would make a partial exit through the IPO.

Infosys bags GST contract and partners with US firm- The comapany has received GST (goods and services tax) contract and partnering with US company for digitisation. The company has received five-year GST contract worth Rs 1,400 crore from government, which included system development and operation work. Additionally, it also signed a three-year agreement with TOMS Shoes to maintain and develop its digital platform. The agreement will enable TOMS to streamline management of its web-based properties and introduce automation technologies to lower overall support and development costs, said the company in its filing to exchanges. Infosys will provide TOMS, the California-based shoe maker, with information technology support in all six countries – US, Canada, Germany, UK, France and Netherlands. The stock rallied 2.5% in its initial trade however it managed to close in green in today’s market turmoil.

Mindtree rallied 5%– The stock rallied more than 5% in today’s trade after it was selected by Swedish medical device company for SAP application management. “Mindtree has been selected by Molnlycke Health Care to enhance business efficiency using the SAP application suite. This will help Molnlycke optimise time to market of its products,” said the IT solutions provider in its filing to exchanges. According to the filing, the program spans across 32 countries and 7,500 employees of Swedish company, creating a strong and uniform IT governance structure resulting in enhanced visibility across all departments. This will result in cost effective delivery globally, on a single service management platform. Rostow Ravanan, executive director of Mindtree said, “The recent acquisition of Bluefin Solutions in SAP consulting and HANA segments uniquely positions us to deliver transformational services to Molnlycke.”