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Pre Session- Sensex may stage a rebound after frantic sell-off Analysis for Aug 25, 2015

By Religare

Indian equity benchmarks are set to recover from their worst outing since 2009, as a three-day plunge in the Sensex which has knocked off 2,190 points creates bargain buying opportunity for traders, at existing levels. Tracking a recovery in most Asian stocks barring China, which bounced back from two-year lows and robust gains in the SGX CNX Nifty Index futures for August delivery which surged 1.85 per cent or 147 points at 7,943 at 10:47 am Singapore time, Dalal Street is set for a gap up opening today. Traders may also take some confidence from RBI Governor Raghuram Rajan"s words who on Monday tried to calm fears over the ongoing turbulence in stock markets. Rajan stressed that India"s strong macroeconomic fundamentals and a robust forex reserves kitty can act as a cushion against market volatility owing to a global turmoil, while hinting at a further cut in policy rates to boost growth. Marking its third biggest drop in history, the 30-share Sensex on 'Black Monday" tumbled by 1,624.51 points or by 5.94 per cent to end at 25,741.56 as the rupee hit a fresh two-year low of 66.74 vs. the USD amidst mayhem across global markets with shares in China crashing nearly 9 per cent. Notwithstanding India"s robust fundamentals, Dalal Street has also fallen prey to a panic global sell-off which has wiped out more than USD 5 trillion of investor wealth since August 11 when China announced a shocking currency devaluation move which signaled a worsening slowdown in the world"s second biggest economy while threatening to ignite a fresh currency war. Monday"s stock market crash wiped out Rs 7 lakh crore from Indian shares with overseas investors on a selling spree as a global meltdown forces them to cut risky bets. Foreign investors have sold shares worth nearly Rs 9,000 crore in the cash segment, in the past three trading sessions. Volatility may remain high as markets in China extend losses following the biggest drop since 2007 on Monday, that erased all of this year"s gains, and ahead of Thursday"s August Futures & Options (F&O) contract expiry.


A recovery was noted on the Asian front, with markets in Hong Kong up by nearly 2 per cent, while that in Japan surged over 1 per cent following Monday"s freefall. China"s Shanghai Composite, which had plummeted 8.5 per cent on Monday, pared early losses but was still down over 3 per cent, extending the steepest rout in eight years on concerns over reduced support from the government to prop up equities. China worries also pushed Wall Street deep into the red on Monday, with the Dow Industrials, Nasdaq Composite and S&P 500 bleeding more than 3 per cent, the biggest drop in four years. The Dow Jones Industrial Average crashed by 1,000 points at the opening bell, cutting its losses to 588 points before close, in a day of wild swings as China slowdown fears and plunging commodities sent global stocks into a spin.


Top traded Volumes on NSE Nifty – ICICI Bank Ltd. 30284166.00, State Bank of India 29561705.00, NTPC Ltd. 17715914.00, Axis Bank Ltd. 17627734.00 and Bank of Baroda 15311574.00.

On BSE, total number of shares traded was 36.81 Crore and total turnover stood at Rs. 4386.38 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 2095165 with a total turnover of Rs. 48636.87 Crore. Along with this total number of contracts traded in stock futures were 2403998 with a total turnover of Rs. 62633.62 Crore. Total numbers of contracts for index options were 19261939 with a total turnover of Rs. 416627.72 Crore and total numbers of contracts for stock options were 830290 with a total turnover of Rs. 23233.69 Crore.

The FIIs on 24/08/2015 stood as net seller in equity and debt. Gross equity purchased stood at Rs. 4582.10 Crore and gross debt purchased stood at Rs. 766.44 Crore, while the gross equity sold stood at Rs. 6881.42 Crore and gross debt sold

Story first published: Tuesday, August 25, 2015, 9:00 [IST]
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