A day after recovery, Sensex crashed over 1,000 points on weak global cues; banking, IT, realty stocks crumbled. The benchmark Sensex closed (-)1.84 percent down to 54,303.44. The broader Nifty50 closed (-)1.68 percent to 16201.80 points.
The 30 stock S&P BSE Sensex slumped 1016.84 points or 1.84 per cent to 54,303.44 points against its previous day's close at 55,320.28 points. Earlier, Sensex started the day in the negative at 54,760.25 points. Selling pressure intensified in the afternoon dragging the Sensex down to 54,205.99 points in the intra-day.
The benchmark stock markets' key indices, Sensex and Nifty, were trading around 2 per cent down in the afternoon session on Friday dragged by heavy selling pressure in banking, metal, IT and energy stocks.
The 30 stock S&P BSE Sensex was trading 1069.15 points or 1.93 per cent down at 54,251.13 points at 2.15 pm, against its previous day's close at 55,320.28 points.
Grasim, Apollo hospital, Asian paints, Dr Reddy's and Divis lab were among the top Nifty gainers whereas, Kotak Mahindra, Bajaj Finance, HDFC, Hindalco, Reliance were among the top losers.
Kotak Bank slumped 3.96 per cent to Rs 1792.10. Bajaj Finance tumbled 3.90 per cent to Rs 5667.85. HDFC slipped 3.80 per cent to Rs 2179.55. The index heavyweight Reliance Industries Limited dipped 3.02 per cent to Rs 2714.
Wipro slumped around three per cent. Tech Mahindra dipped 2.51 per cent to Rs 1110.25. Infosys slumped 2.47 per cent to Rs 1477.15. TCS fell 1.79 per cent to Rs 3365.35. HCL Technologies closed 0.82 per cent down at Rs 1020. Only eight of the 30 scrips that are part of the Sensex closed in the positive.
Asian Paints rose 0.78 per cent to Rs 2708.75. Dr Reddy's Laboratories climbed 0.62 per cent to Rs 4353. UltraTech Cement, Hindustan Unilever, Titan, Maruti Suzuki, Nestle India and NTPC also closed in the positive.
Negative global cues impact markets
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd, said, The pessimistic mood across several global markets had a rub-off effect on local equities as nagging issues like rising interest rate scenario, higher inflation levels and persistent FII selling spooked markets. Bigger concerns of stagnating growth and its effect on corporate earnings going ahead is also making investors nervous, resulting in periodic selloffs.
Technically, after a long time, the Nifty closed below 20 day SMA and, on intraday charts, it is consistently forming a lower top formation which is largely negative. On weekly charts the index has formed a long bearish candle indicating further downtrend from the current levels. If the Nifty falls below 16,150, it could slip up to 16,000-15850 levels. On the flip side, a fresh pullback rally is possible only after the 16,300 breakout. Above which, the index could move up to 16,400-16,500.
Mohit Nigam, Head - PMS, Hem Securities said, Indian benchmark indices made a gap-down opening and tried to recover during the noon session but were not able to sustain due to global cues and closed in red. Indian markets are following the trend of global markets and reacting to the US CPI data which is going to be released today. Among sectors, selling was visible in Bank, IT & Financial Services whereas chemicaland pharma sector closed in green.
On the technical front, the key resistance levels for Nifty50 are 16,400 and on the downside 16,050 can act as strong support. Key resistance and support levels for Bank Nifty are 34,800 and 34,000 respectively.
Equity markets close on negative note
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, the “Indian equity markets ended the week on a negative note. Major key indices and sectoral indices declined during the week. Amid persistent inflation, Central Banks continued with monetary policy tightening. RBI hiked repo rate by 50 bps to 4.9 percent. European Central Banks decided to end net asset purchases under its asset purchase programme and also signaled towards rate increase in its July monetary policy meeting. Crude oil prices inched up with Brent crude trading above $120 per barrel mark. The US 10-year treasury yield again moved above 3 percent. FII’s continued with their selling of Indian equities. Monsoon progress needs to watched out for as a good monsoon will calm concerns about further food inflation. However, inflation, commodity price movement and Central bank measures are critical factors for market performance over the near to medium term".
Rupee hits record low
The Indian rupee hit a record low of 77.85 against the US Dollar today. Some of the reasons behind this weakening includes persistent FII selling from past few months, rising bond yields, increasing oil prices and inflationary pressures for coming quarters.
"We need to closely monitor the US consumer inflation data, if it remains at elevated levels and bond yields continue to rise, we may witness more FII selling which would negatively impact INR. However if the inflation data comes better than expected and the US bond yield stabilizes, we may see some signs of reversal in USD INR," Nigam said.
Gold declines by Rs 58; silver tumbles Rs 601
Gold prices declined by Rs 58 to Rs 50,793 per 10 grams in the national capital on Friday, according to HDFC securities. In the previous trade, the yellow metal settled at Rs 50,851 per 10 grams.
Silver also tumbled by Rs 601 to Rs 60,914 per kg from Rs 61,515 per kg in the previous trade.
In the international market, gold was quoting lower at USD 1,846 per ounce and silver was trading flat at USD 21.69 per ounce.
Rupee falls 11 paise to record low of 77.85 against US dollar
The rupee tumbled 11 paise to close at a fresh lifetime low of 77.85 (provisional) against the US dollar on Friday as a sell-off in domestic equities and stronger greenback overseas weighed on investor sentiment.
Persistent foreign capital outflows, elevated global crude oil prices, and risk-averse sentiments also impacted the domestic unit, forex traders said.
At the interbank foreign exchange market, the local currency opened at 77.81 and witnessed an intra-day high of 77.79 and a low of 77.87 against the US dollar.
The local unit finally settled at its all-time low of 77.85, down 11 paise over its previous close of 77.74.
Mohit Nigam, Head - PMS, Hem Securities, said, the INR hit a record low of 77.85 against the US Dollar today. Some of the reasons behind this weakening includes persistent FII selling from past few months, rising bond yields, increasing oil prices and inflationary pressures for coming quarters.
We need to closely monitor the US consumer inflation data, if it remains at elevated levels and bond yields continue to rise, we may witness more FII selling which would negatively impact INR. However if the inflation data comes better than expected and the US bond yield stabilizes, we may see some signs of reversal in USD INR.
