MARKETS TUMBLE IN OIL
Stocks fell for the third straight day as the benchmark Sensex today ended a sharp 316 points lower at 24,223.32 -- a two-week low -- on renewed concerns of a slowing global growth and further weakness in oil prices. Market sentiment, which is still fragile as China's economy continues to struggle, took a hit after oil prices resumed their slide and dropped below USD 30 a barrel in Asian trade. A monthly PMI survey today showed that India's services activity rose to a 19-month high of 54.3 in January from 53.6 in December, but that was not enough to stem the slide. The 30-share Sensex was on edge right from the word go as the sustained foreign outflow amid a global rout and losses in blue-chip stocks took hold before the market barometer closed at 24,223.32, down 315.68 points, or 1.29 per cent. This is its lowest closing since January 21. The rupee, which again breached the 68-mark against the dollar at the close, dealt another blow. The gauge has lost 647 points in the three days. The NSE Nifty too remained under pressure and slipped below the 7,400-level by dropping 93.75 points, or 1.26 per cent, to close the day at 7,361.80. "The continuing volatility in crude price has dragged the benchmark indices for the third day. The rising uncertainty in global market is influencing investors to pull out funds from emerging markets," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd. Of the Sensex pack, 27 ended lower. Among those that lost, BHEL was the worst-hit, down 4.86 per cent followed by NTPC at 4.10 per cent. Others included Tata Steel, ICICI Bank, Tata Motors, Axis Bank, Cipla, RIL, SBI, Asian Paints, Wipro, ONGC and Adani Ports. HUL broke from the crowd, gaining the most by surging 2.66 per cent, while TCS rose 0.77 per cent and Sun Pharma and Bajaj Auto rose by up to 0.24 per cent. The BSE power index got the severe drubbing, falling most by 4.16 per cent, followed by capital goods 2.79 per cent, realty 2.63 per cent, infra 2.30 per cent, metal 2.03 per cent, PSU 1.96 per cent, banking 1.63 per cent, auto 1.62 per cent and oil and gas 1.58 per cent. The broader markets were no better, with the BSE small-cap index ending 2.25 per down and the mid-cap 1.30 per cent.
Asian markets tumble
Oil cast a cloud over Asian markets again today after prices fell back below USD 30 a barrel, hammering energy firms once more and sending stocks deeper into the red. With the euphoria of Friday's Bank of Japan stimulus but a distant memory, Tokyo led the regional losses followed by Hong Kong, where insurance giant AIA lost almost a tenth of its value at one point on fears China would tighten insurance rules. Despite the turmoil at home China National Chemical Corp (ChemChina) today offered to buy Switzerland's Syngenta for USD 43 billion, which would be a record overseas purchase by a Chinese firm. The plunge in oil prices to 12-year lows has sent shudders through world markets, helping wipe trillions of dollars off share valuations and even raising fears of recession. Crude resumed its downward trend this week, jettisoning most of the gains seen in a rally last week fuelled by hopes for OPEC-Russian talks on output cuts. US benchmark West Texas Intermediate crashed more than 11 percent on Monday and yesterday to fall back through the USD 30 level for the first time since January 21. Brent lost almost six per cent in the same period. Today early losses were pared on bargain-buying but dealers remain on edge ahead of a US report analysts warned could see a further increase in stockpiles. WTI was up 0.6 per cent and Brent up 0.4 per cent in late Asian trade. Oil prices have crumbled about 75 per cent since mid-2014, hit by a perfect storm of weak demand, oversupply, overproduction, a slowing global economy and a strong dollar. After already taking a hit yesterday, regional energy stocks were buffeted again today. In Hong Kong, CNOOC shed four per cent in late trade and PetroChina dived 4.1 per cent while Kunlun Energy sank 2.8 per cent. Sydney-listed Santos lost 5.1 per cent and mining giant BHP Billiton lost 4.4 per cent while Woodside Petroleum fell five per cent. The losses followed other big guns in New York and Europe. BP fell 8.7 per cent in London after it announced a loss of USD 6.48 billion last year and another 3,000 job cuts. Chief executive Bob Dudley warned: "We expect 2016 to be tough." BP's American rival ExxonMobil managed to stay profitable but reported a 58 per cent drop in fourth-quarter earnings and announced plans to slash its capital budget and suspend its share repurchase programme.
Dow -1.5 per cent
US stocks tumbled early today as ExxonMobil and other petroleum companies reported weak earnings due to the oil rout. But Google parent Alphabet rose 4.1 per cent to surpass Apple as the world's most valuable company after reporting a five per cent rise in fourth-quarter earnings to USD 4.92 billion. About 45 minutes into trade, the Dow Jones Industrial Average was at 16,196.54, down 252.64 points (1.54 per cent). The broad-based S&P 500 fell 26.97 (1.39 per cent) to 1,912.41, while the tech-rich Nasdaq Composite Index shed 52.83 (1.14 per cent) at 4,567.53. Dow member ExxonMobil fell 2.8 per cent after reporting a 58 per cent drop in fourth-quarter earnings to USD 2.8 billion. US shares of BP tumbled 8.7 per cent after the British oil giant reported a sharp drop in fourth-quarter profits and a 2015 loss of USD 6.5 billion Mid-sized oil producer Anadarko Petroleum rose about 0.5 per cent after reporting a USD 1.3 billion loss for the fourth quarter. The sell-off in US equities followed even deeper declines in European stock markets. Analysts said another drop in oil prices today was responsible for the poor sentiment. Dow member Pfizer declined 0.5 per cent as it reported a 50 per cent drop in fourth-quarter earnings to USD 613 million due to higher expenses and the strong dollar. Mattel surged 11.6 per cent after reporting fourth-quarter net income of USD 215.2 million, up 10.8 per cent from the year-ago level and better than expected. Worldwide sales of its iconic "Barbie" doll rose one per cent. Royal Caribbean Cruises sank 13.0 per cent after it projected 2016 earnings of USD 5.90-USD 6.10 per share, below the USD 6.27 expected by analysts. Rival firm Carnival fell 6.6 per cent. Yahoo fell 2.4 per cent on a report that the technology company plans to cut 15 per cent of its workforce, or 1,600 jobs. After better-than-expected earnings, Dow Chemical rose 1.7 per cent, UPS gained 1.3 per cent and Michael Kors vaulted 16.3 per cent.