Apart from negative global cues, investors exercised caution ahead of companies’ July-Sept earnings
Mumbai : The Indian markets witnessed a virtual carnage due to global jitters amid caution ahead of the earning season as investors took to selling after a five-day break.
It sent the benchmark Sensex plummeting sharply by a massive 296 points to close at two-month low. The selling was indiscriminate as all sectoral indices bore the brunt of the intense sell-off even as mid-cap and small-cap crumbled.
“So far the markets have moved more on anticipation of structural reforms & due to the ensuing capital flows. For a sustained rise, the adequate corporate earnings growth has to follow.
The reforms hope should turn into reality too, else the disappointment risk could raise its head,” said Devendra Nevgi, CEO of ZyFin Advisors. The 30-share index resumed lower at 26,487.51 after long weekend holidays and dropped further to 26,250.24 before finishing at 26,271.97, disclosing a loss of 296.02 points or 1.11 per cent from its last closing level. The NSE 50-share Nifty also fell by 93.15 points or 1.17% to close at 7,852.40.
Renewed fears of a recession in the Eurozone following downbeat industrial data from Germany and downgrading China’s growth outlook against the backdrop of heightened uncertainty over the US monetary policy mainly rattled investors confidence once again. Germany reported its worst industrial output figures fall in five-and-a-half years.
Shares of metal companies were the worst-hit due to lingering concerns over de-allocated coal blocks and softening global commodity prices. Sector-wise, the S&P BSE metal index was down 301.48 points, followed by healthcare index which was lower by 265.21 points.
Capital goods index lost 252.62 points, consumer durables index fell by 168.24 points, bank index fell by 152.27 points, and automobile index was down 147.17 points.
Tech major Infosys will kick start the second quarter earnings season on October 10.
“Investors are awaiting comments from FOMC, slated to be released on Wednesday, regarding its take on the timing of interest rate hikes especially in the light of the strong jobs data,” said Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities. A handful of frontline stocks withstood the market carnage and posted gains included NTPC, Gail, Power Grid, Tata Power, Wipro, Tata Motors and Bharti Airtel.
