"Market has breached 8,000 levels and once the event is out of the way so any recovery one should reduce position as 7,500 could be on cards," said AK Prabhakar, head-research, IDBI Capital.
The Indian rupee lost 1% in opening trade on early trends that Britain would leave the European Union following a nationwide referendum.
The rupee opened at 67.88 a dollar, from its previous close of 67.25 a
dollar, but fell to 68 a dollar within a few minutes of opening trade,
not very far from its lifetime low of 68.85 a dollar reached on 28
August 2013. At 9.17, rupee was trading at 68.18 a dollar.
"As good deal of negativity may have been priced in at open, potential for value buying or a bounce back, is higher than the potential for extended downside. With only a few stocks have significant exposure to EU/UK, the impact on Indian stocks may not be en masse, with strong domestic cues in the backdrop. However, companies that have exposure to yen could see significant volatility. Rupee is likely to weaken against US Dollar, as the greenback is expected to see demand as a safe haven currency in the Brexit backdrop. But with forex reserves near record peaks, and with recent instances of RBI stepping in to arrest volatility, rupee is less expected to weaken much beyond 68," says Anand James, Chief Investment Strategist, Geojit BNP Paribas.
Meanwhile, as gold at the highest level since July 14, 2015 as official results so far from a British referendum pointed to a victory for a campaign to exit the European Union.
ALSO READ: India ready to deal with EU referendum
"As good deal of negativity may have been priced in at open, potential for value buying or a bounce back, is higher than the potential for extended downside. With only a few stocks have significant exposure to EU/UK, the impact on Indian stocks may not be en masse, with strong domestic cues in the backdrop. However, companies that have exposure to yen could see significant volatility. Rupee is likely to weaken against US Dollar, as the greenback is expected to see demand as a safe haven currency in the Brexit backdrop. But with forex reserves near record peaks, and with recent instances of RBI stepping in to arrest volatility, rupee is less expected to weaken much beyond 68," says Anand James, Chief Investment Strategist, Geojit BNP Paribas.
Meanwhile, as gold at the highest level since July 14, 2015 as official results so far from a British referendum pointed to a victory for a campaign to exit the European Union.
GLOBAL MARKETS
Asian markets pared early gains and turned negative after investors
turned sellers after initial results of the EU referendum indicated
probability of Britain leaving the European Union compared to the
earlier opinion poll predictions of 'remain'. Shares in Japan were the
top losers with the Nikkei down over 3% while the Shanghai Composite was
down 0.6%. Shares in Hong Kong were also sharply lower with the Hang
Seng down nearly 3% while the Straits Times eased nearly 1%.
US stocks ended over 1% higher on Thursday after opinion polls
indicated that the Britain is most likely to remain a member of the
European Union. The Down Jones industrial average ended up 1.3% at
18,011, the S&P 500 ended up 1.3% at 2,113 and Nasdaq Composite
ended up 1.6% at 4,910.
US stock futures plunged, as results of the UK referendum on European Union membership pointed toward a vote to leave the bloc after more than four decades of membership, fanning speculation that a divided Europe would put another brake on already fragile global growth. S&P 500 Index contracts slumped 4.9%, joining losses in equity futures in the UK.
US stock futures plunged, as results of the UK referendum on European Union membership pointed toward a vote to leave the bloc after more than four decades of membership, fanning speculation that a divided Europe would put another brake on already fragile global growth. S&P 500 Index contracts slumped 4.9%, joining losses in equity futures in the UK.
BREXIT LINKED STOCKS
Metal companies like Tata Steel and
Hindalco, auto majors such as Tata Motors, Motherson Sumi, IT companies
like TCS, Tech Mahindra, HCL Tech and Pharma companies like Lupin, Dr
Reddy’s Laboratories are likely to get impacted the most in case Britain
decides to leave European Union (EU). Tata Motors cracked
8%, Tata Steel slumped 61%, Hindalco lost 4%, Motherson Sumi lost 9%,
Lupin and Dr Reddy’s Lab lost 2% and 1.3% respectively.
Other stocks in news include Sun Pharma whose board approved
announced a Rs 675-crore buyback offer, to purchase up to 7.5 million
equity shares. The board fixed a price of Rs 900 a share, a premium of
19.7% over Thursday's closing Rs 751.70. The stock is trading with
marginal losses.
State Bank of India plans to raise $1.5 billion from foreign markets
via bonds to fund its expansion and pay off securities maturing in the
year. The stock lost over 3%.
India on Thursday launched a pilot project aimed at introducing
compressed natural gas (CNG) as fuel for two-wheelers. The project,
nick-named "Hawa Badlo", is being implemented by Delhi's city gas
distributor Indraprastha Gas Ltd (IGL) and its parent firm, GAIL
(India). GAIL is down 2%.
ONGC, IOC, HPCL, BPCL: Indian state oil firms may buy a stake in
Russian oil major Rosneft, oil minister Dharmendra Pradhan said,
signaling a move that would hoist the country's overseas energy
portfolio to a new high as the company pumps more oil than ExxonMobil.
ONGC, HPCL, BPCL,IOC have declined up to 3.5%.
Car major Maruti Suzuki India has lost 3% as the Japanese yen strengthened against the dollar. The Japanese yen surged against the dollar on global risk aversion generated by Brexit fears.
The Japanese currency is perceived as a haven in times of global financial and global economic worries.
Tata Motors and Tata Steel have plummeted between 9%-12% ahead of the Brexit referendum outcome. Both Tata Steel and Tata Motors have large operations in UK and Europe.
Tata Motors derives majority of its revenue from its British luxury car unit Jaguar Land Rover (JLR). JLR is the largest automotive manufacturer in Britain. It is one of the UK's largest exporters and generates over 80% of its revenue from exports.
Shares of ten IT companies have fallen between 2%-5% as early voting returns on the Brexit referendum suggested Britain was on the brink of leaving the European Union
TCS (down 2.41%), MphasiS (down 4.01%), HCL Technologies (down 4.61%), Tech Mahindra (down 3.85%), Oracle Financial Services Software (down 2.42%), Wipro (down 2.09%), Infosys (down 2.23%), Persistent Systems (down 4.6%), MindTree (down 3.01%) and Hexaware Technologies (down 2.34%) edged lower. The UK is the second biggest IT outsourcing market after the United States for the IT companies.
Stocks of four companies involved in oil exploration & production activities are down upto 4% as global crude oil prices dropped post referendum results suggesting a vote for Brexit.
Cairn India (down 4.05%), ONGC (down 3.9%), Oil India (down 2.22%) and Reliance Industries (RIL) (down 3.33%) dropped.
Lower crude oil prices will result in lower realization from crude oil sales for oil exploration & production (E&P) firm.
With Reuters & Capital Market input
Car major Maruti Suzuki India has lost 3% as the Japanese yen strengthened against the dollar. The Japanese yen surged against the dollar on global risk aversion generated by Brexit fears.
The Japanese currency is perceived as a haven in times of global financial and global economic worries.
Tata Motors and Tata Steel have plummeted between 9%-12% ahead of the Brexit referendum outcome. Both Tata Steel and Tata Motors have large operations in UK and Europe.
Tata Motors derives majority of its revenue from its British luxury car unit Jaguar Land Rover (JLR). JLR is the largest automotive manufacturer in Britain. It is one of the UK's largest exporters and generates over 80% of its revenue from exports.
Shares of ten IT companies have fallen between 2%-5% as early voting returns on the Brexit referendum suggested Britain was on the brink of leaving the European Union
TCS (down 2.41%), MphasiS (down 4.01%), HCL Technologies (down 4.61%), Tech Mahindra (down 3.85%), Oracle Financial Services Software (down 2.42%), Wipro (down 2.09%), Infosys (down 2.23%), Persistent Systems (down 4.6%), MindTree (down 3.01%) and Hexaware Technologies (down 2.34%) edged lower. The UK is the second biggest IT outsourcing market after the United States for the IT companies.
Stocks of four companies involved in oil exploration & production activities are down upto 4% as global crude oil prices dropped post referendum results suggesting a vote for Brexit.
Cairn India (down 4.05%), ONGC (down 3.9%), Oil India (down 2.22%) and Reliance Industries (RIL) (down 3.33%) dropped.
Lower crude oil prices will result in lower realization from crude oil sales for oil exploration & production (E&P) firm.
With Reuters & Capital Market input
No comments:
Post a Comment