On Thursday, reports of Argentina defaulting on bonds sent US markets in a sell mode. The Dow Jones closed 1.88% lower, while Nasdaq ended 2.09% lower on Thursday.
On Friday, the rupee remained under pressure on US Feds decision to cut its monthly bond-buying by another $10 billion. The Indian unit closed at a four-month low of 61.18 against the dollar.
On Friday, foreign institutional investors (FIIs) sold shares worth $175 million, while domestic institutional investors bought shares worth $176 million. YTD, FIIs have bought shares worth $11.68 billion.
The markets shrugged positive data on manufacturing activity with Hindalco (-3.71%), Gail (-3.07%) and Tata Power (-3.06%) leading the rout. The HSBC India Manufacturing Purchasing Managers Index rose to a 17-month high of 53.0 in July, from 51.5 in June.
Asian peers were also hit. The Nikkei (-0.63%), Hang Seng (-0.91%), Kospi (-0.15%), Straits Times (-0.88%), Jakarta Composite (-0.19%), Taiwan Taiex (-0.53%) and Shanghai Composite (-0.74%) ended in the red.
European markets were trading lower with the CAC
(-1.41%), DAX (-2.04%) and FTSE (-1.37%) trading in the red at 4.15 pm IST.
Back home, 25 of the 30 Sensex stocks ended in the red on Friday. In the broader market, breadth was weak with 1,819 stocks traded on the BSE ending lower compared with 1,073 advances. All 13 BSE sectoral indices ended in the red. The BSE Consumer Durables (-3.27%), BSE Oil & Gas (-2.16%) and BSE Metal (-1.90%) were the major losers.
The markets would be eyeing the US jobs data as a positive data would strengthen the case for early rate hike by US Fed. The NSE cash turnover on Friday was at R18,734.10 crore, while the turnover in the F&O segment stood at R1.78 lakh crore.
Experts say markets are looking for concrete policy measures from the new government. Earlier, we were seeing re-rating in anticipation of policy decisions. Now, markets want the government to deliver, said Gaurav Mehta, VP, institutional equities, Ambit Capital. He added that apart from global cues, Friday's fall could be attributed to the continued underperformance seen in the broader markets and increased supply due to rising number of QIPs. While we are still in a bull market, the current correction could take Nifty till 7,100 points, he said.