Markets LIVE: Indices Close in the Red, But Recover Early Losses; Sensex Just Above 34,000-Mark, Nifty at 10,400

As markets extended losses for the sixth successive session, investors became poorer by nearly Rs 10 lakh crore, with Rs 2.7 lakh crore of wealth being wiped out in Tuesday's session only amid sell-off in world stocks. Led by a continuous sell-off, the market capitalisation of BSE-listed companies plummeted by Rs 9,90,476.93 crore to Rs 1,45,22,830 crore in six trading sessions.

FINANCE SECRETARY ON RECENT SLUMP IN STOCK MARKETS: The recent slump in Indian stock markets was a result of global weakness and not because of a tax on long term capital gains that the government had announced in its federal budget last week, Finance Secretary Hasmukh Adhia  said on Tuesday. In an interview, Adhia said the reaction of the markets to the tax had been limited and could be seen on the day the tax was announced on February 1. He said the Indian markets had been swept along in the global concerns but were fundamentally strong and would recover as those worries eased.

How governments across world reacted to stock market fall

United States
•The White House released a statement in response to queries about the markets, saying President Donald Trump is focused “on our long-term economic fundamentals, which remain exceptionally strong”

Japan
•Bank of Japan Governor Haruhiko Kuroda told parliament that Japanese stocks were affected by the US decline
•Prime Minister Shinzo Abe said he trusts Kuroda to handle monetary policy; Kuroda said the BOJ will continue its monetary easing as inflation is only halfway to its 2 percent target

Indonesia
•“We expect investors will be more in favor of Indonesia, especially when global markets are in an adjustment period like now,” said Suahasil Nazara, head of the fiscal policy agency at the Finance Ministry

Singapore
•Deputy Prime Minister Tharman Shanmugaratnam, the coordinating minister for economic and social policies, tweeted a link Tuesday to a Washington Post opinion piece that argues the correction could prove a healthy “awakening” and a sign of post-crisis healing. “Worth reading this @scmallaby piece,” Tharman said in the tweet

The start was distinctly weak as the markets went into a free-fall. The Sensex crashed by about 1,275 points to sink below the key 34,000-mark while the NSE Nifty plunged 390 points within minutes of opening.

This is its weakest closing since January 5 when the gauge had settled at 34,153.85. The 50-share NSE Nifty too closed down 168.30 points, or 1.58 per cent, at 10,498.25 -- a level last seen on January 3 when it closed at 10,443.20. Perturbed at the second consecutive day of market carnage, fund managers fear the sharp plunge in the market may bring down the inflows in the mutual fund industry by 50 percent.

#CNBCTV18Market | Lupin top index loser after a dismal Q3; show Stock hit 52-week low today (it hit a 52-week high on the same day last year) pic.twitter.com/Vi4vmdSDRg

— CNBC-TV18 (@CNBCTV18Live) February 6, 2018

#CNBCTV18Market | Only 5 Nifty stocks in the green today. Bajaj Fin top gainer after reversing losses in intra-day trade pic.twitter.com/TqlF50ZRWi

— CNBC-TV18 (@CNBCTV18Live) February 6, 2018

#CNBCTV18Market | Market ends lower after massive volatility; Nifty turns negative for 2018; Sensex & Nifty Bank manage to remain positive for the year pic.twitter.com/OuJVydTgzN

— CNBC-TV18 (@CNBCTV18Live) February 6, 2018

INDIAN MARKETS CLOSING | Sensex and Nifty have closed in the red with deep cuts, but way higher than the opening levels. The BSE Sensex, which saw the biggest intra-day volatility since November 2016, closed 561 points down at 34,195. The broader Nifty recovered 200 points to settle at 10,498.

3:15pm UPDATE | Markets Remain Under Pressure

Benchmark indices remain under pressure despite recovery from day's lows. The 30-share BSE Sensex was down 618.46 points or 1.78 percent at 34,138.70 and the 50-share NSE Nifty fell 186.50 points or 1.75 percent to 10,480.

Peter Garnry, head of the quantitative strategies at ‎Saxo Bank who predicted Monday’s plunge, tweets the day after.

This is the aft-mkt reaction that everyone is talking about in the XIV ETN (short VIX futures) which plunged 85 % in aft-mkt. There are provisions that trigger liquidation in case of 80 % decline. Question is whether aft-mkt quotes count... pic.twitter.com/CZeFC83PrW

— Peter Garnry, CFA (@petergarnry) February 6, 2018

Peter Garnry said that global stocks were headed for a correction in the second half of the first quarter.

Gold Jumps to 14-Month High as Global Stock Markets Melt

Amid the rout in global equities today, gold soared to over 14-month high of Rs 31,600 per ten gram — gaining Rs 330 at the bullion market here, largely in sync with the overseas trend. The gains were also supported by strong demand from local jewellers to meet the wedding season demand. Silver gained as well and reclaimed the Rs 40,000-per kg mark on the back of increased offtake by industrial units. Traders said a massive sell-off in stock markets globally led investors to seek shelter in safe haven investments, particularly precious metals.

GLOBAL WRAP AT 3pm | Stock markets around the world took a battering on Tuesday, following a dramatic sell-off on Wall Street that triggered concerns that a potentially healthy pullback from record highs could turn into a protracted bear market. Among the biggest fallers on Tuesday was Tokyo's Nikkei 225 stock average, which ended 4.7 percent lower at 21,610.24, having earlier been down a massive 7 percent. All other Asian bourses tanked, too, including the Shanghai Composite index, which closed 3.4 percent lower at 3,370.65 and Hong Kong's Hang Seng, which skidded 5.1 percent to 30,595.42. Australia's benchmark S&P ASX 200 slid 3.2 percent to 5,833.30 and South Korea's Kospi declined 1.5 percent to 2,453.31. The selling persisted into European trading hours, though there was some sign of recovery following the initial losses at the opening bell. The FTSE 100 index of leading British shares was 1.8 percent lower at 7,206 while the CAC 40 in France fell 1.4 percent to 5,212. Germany's DAX was down 1.9 percent at 12,441. Though many stock indexes are close to where they started the year, the losses mark a major reverse following a sustained period of gains, a pullback that market pros have been predicting for some time.

EXPERT SPEAK | “Markets are back below our base case targets but we think valuations, earnings and euphoric investor sentiment will adjust more meaningfully before we see a trough,” says Jonathan Garner of Morgan Stanley.

Some Stocks Still Managed to Hit 1-Year Highs

As the market rout continued, some stocks still managed to make gains, with over 30 companies hitting their 52-week high levels today and gains in blue-chips such as Bharti Airtel and Tata Steel cushioned the fall in the broader market to some extent. The BSE Sensex cracked below the 34,000-mark by plunging about 1,275 points or 3.6 per cent in opening trade today mainly due to sell-off in world markets. However, during the late trading session, the index managed to recover some of the lost ground and was quoting 368.17 points or 1.06 per cent lower at 34,388.99 at 14:21 pm. As many as 32 stocks hit their 52-week high on BSE today, including Polaris Consulting & Services. Among the 30-share Sensex stocks, four companies were trading in green led by Tata Steel, Bharti Airtel, Larsen & Toubro and ICICI Bank. On the other hand, over 200 stocks hit their 52-week lows on BSE today.

Indian investors lost around Rs 4.95 lakh crore amid sell-off in the broader market on Tuesday where the benchmark BSE Sensex tumbled 1,275 points or 3.6 percent in opening trade.

EXPERT SPEAK | "The unprecedented downfall in Dow yesterday (Monday) and combination of other negative factors like the high fiscal deficit projected and proposal on long-term capital gains tax (LTCG) and fear of the stand that the Reserve Bank of India will take during Wednesday's monetary policy review had led to this melt-down or selling panic,” says Deepak Jasani, head of Retail Research at HDFC Securities.

EXPERT SPEAK | According to Anita Gandhi, Whole Time Director, Arihant Capital Markets, the recent correction in the equity markets will help to bring in valuations to the realistic level for new entrants and long-term players. "Equity markets started on negative note with weak global cues and a sharp fall in the Dow Jones. Negative closing for two previous trading sessions had a cascading impact on the leveraged positions. The fall has been sharper than rise. However, this correction will be helpful in bringing valuations to the realistic and attractive level for the new entrants, as well as for long term players. The recently announced Union Budget is growth-oriented and will help the economy in growth ignition, provided timely execution takes place,” says Gandhi.

EXPERT SPEAK | “The rally last year was a global rally on liquidity easing. Hence, any inkling of liquidity tightening, at a faster than expected pace, would lead to asset price contraction. That has played out over last two weeks. With earnings picking up, markets will focus on them in due time. Hence, if we look beyond near term volatility, price corrections may turn out to be opportunities," says Anshul Saigal, Portfolio Manager and Head-PMS of Kotak Mutual Fund.

2:30pm UPDATE | Markets Continue Recovery

The market recovered sharply from the day's low, led by private banks like ICICI Bank (up 2 percent) and Axis Bank (up 1.4 percent). The 30-share BSE Sensex was down 264.33 points or 0.76 percent at 34,492.83 and the 50-share NSE Nifty fell 83 points or 0.78 percent to 10,583.50. About five shares declined for every share rising on the BSE.

Market Turns Positive for 2018

The recovery from day's low has helped the market turn positive for 2018. The 30-share BSE Sensex shed 1,274 points in opening, but showed some recovery in afternoon. The index fell 462.78 points or 1.33 percent to 34,294.38 and the Nifty slipped 136.70 points or 1.28 percent to 10,529.80. Bajaj Finance, Eicher Motors and Bharti Airtel rebounded with more than 1 percent gains, followed by L&T, ICICI Bank, Tata Steel and Dr Reddy's Labs with moderate gains.

A look at the stocks that have turned positive

#CNBCTV18Market | Market makes a smart recovery, here are the index stocks that have turned positive pic.twitter.com/lt9ZDvRLYw

— CNBC-TV18 (@CNBCTV18Live) February 6, 2018

2pm UPDATE | Markets Make Up a Little

Benchmark indices recouped half of losses in afternoon with the BSE Sensex falling 462.78 points or 1.33 percent to 34,294.38 and the Nifty declining 136.70 points or 1.28 percent to 10,529.80. The market breadth also gradually showed improvement, with more than six shares falling for every share rising on the BSE. Eicher Motors and Bajaj Finance rebounded on short covering, rising over a percent.

Bitcoin Slides Below $6,000; Half Its Value Lost in 2018

Bitcoin plunged more than 20 percent to fall below $6,000 on Tuesday, its latest sharp loss following a series of setbacks, with a global stock market collapse fuelling the selling. The virtual currency fell to $5,992 for the first time since mid-November, according to Bloomberg News, the latest hammering for the cryptocurrency that saw a stratospheric 26-fold rise last year. Tuesday's collapse comes just six weeks after Bitcoin hit a record high of $19,511, fuelled by a flood of speculators looking to make a quick buck. Since those heady days the cryptomarket —which includes dozens of other units — has been pounded by news of crackdowns by governments including in China, Russia and South Korea, one of the biggest markets for the sector. 

ASIAN MARKETS WRAP | Asian stocks plunged on Tuesday after a record-breaking loss on Wall Street, extending a global rout as panicked investors fret over rising US borrowing costs and take profits after months of market euphoria. Tokyo led a collapse throughout the region, briefly diving almost seven percent before closing down 4.7 percent. Hong Kong lost more than five percent in its worst day since summer 2015, while Sydney and Singapore each sank three percent. Among other Asian markets Seoul lost 1.5 percent, Taipei sank five percent, Manila plunged 1.1 percent and Shanghai gave up 3.4 percent. Bangkok plunged 2.4 percent and Jakarta and Kuala Lumpur were also well down. Energy firms were among the biggest victims, with Inpex losing more than four percent in Tokyo, while CNOOC, PetroChina and Sinopec were down between five and 6.5 percent in Hong Kong. Sydney-listed Woodside Petroleum was off nearly four three percent and BHP shed 2.7 percent. Tech giants were also targeted after disappointing earnings reports from Apple and Google parent Alphabet. Tencent, Sharp and Samsung all got a bloody nose. 

ANALYSIS | The long, smooth, record-setting ride on Wall Street is over. The stock market pullback that experts had been saying was long overdue has finally come. Investor fears about higher interest rates escalated into rapid, computer-generated selling on Monday that wiped out all the market's gains for the year. At one point, the Dow Jones industrial average dropped 1,000 points in less than an hour, and it ended with its worst day in more than six years. The Standard & Poor's 500 is now down nearly 8 percent from its record high, set a little more than a week ago. Market professionals warn that the selling could continue for a bit. But many are also quick to say they see no recession looming, and they expect the strengthening global economy and healthy corporate earnings to help stock prices recover.

HANG SENG CLOSING | Hong Kong stocks crumbled more than five percent on Tuesday, making it one of the worst performers on a painful day for Asian markets after a record-breaking collapse on Wall Street fuelled by concerns over rising US interest rates. The Hang Seng Index dived 5.12 percent, or 1,649.80 points, to end 30,595.42 — its biggest close since the China-fuelled sell-off in August 2015. The Shanghai Composite Index lost 3.35 percent, or 116.85 points, to 3,370.65 while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, plunged 4.44 percent, or 80.21 points, to 1,726.09. The losses Tuesday were the worst since August 2015, when a yuan devaluation by Beijing sparked concerns about the Chinese economy. Still, some analysts were upbeat. "I actually think there's buying opportunities, maybe not today, but through this week as this sell-off exacerbates," Sean Fenton, a portfolio manager at Tribeca Investment Partners in Sydney, told Bloomberg News. 

EUROPEAN MARKETS OPENING | Stock markets in Europe have tumbled at the open following the routs on Wall Street and Asia and as investors fret that a healthy correction could turn into a protracted bear market. Minutes after the bell to signal the start of trading, the FTSE 100 index of leading British shares was down 2.5 percent at 7,151, while the CAC 40 in France slid 3 percent to 5,127. It was a similar story on Germany's DAX, which was 3 percent lower at 12,308. Investors around the world have taken fright at the prospect of a higher than anticipated increase in US interest rates this year in the event rising wages stir inflation. Many in the markets had been anticipating some sort of correction following the steady gains over the past year or so, which have pushed some indexes, notably on Wall Street, to a series of record highs.

Market Rout Erodes Rs 9.6 Lakh Crore Investor Wealth in 3 Days

Stock market bloodbath has wiped out a staggering Rs 9.6 lakh crore from investor wealth in three days with the rout continuing amid sell-off in world markets. The BSE benchmark Sensex slumped 1,274.35 points to hit the day's low at 33,482.81 today. Post the Union Budget on February 1, the 30-share index has plummeted by 2,164.11 points. Led by a continuous sell-off, the market capitalisation of BSE-listed companies went down by Rs 9,60,938 crore to Rs 1,43,39,062 crore in three days. The Sensex slumped 309.59 points, or 0.88 per cent, to end at 34,757.16 yesterday. Investor sentiment has remained sluggish after the government announced in the Budget a proposal to levy 10 per cent long-term capital gains (LTCG) tax on equities and projected a fiscal deficit of 3.5 per cent of GDP for 2017-18. It was a sea of red as all the 30-share Sensex components were trading with losses led by Tata Motors. Over 200 stocks hit their 52-week lows on BSE today. During the morning trade, 2,353 stocks declined, while 223 advanced and 95 remained unchanged.