The BSE benchmark Sensex today slumped by 251.33 points to end at 27,350.68 and logged its worst weekly drop in three years on hefty losses in oil&gas, realty and metal shares, amid continued tumble in oil prices raising concern over the strength of the global economy.
As many as 11 of the 12 sectoral indices on BSE ended in the red. Overall, nearly 2,000 stocks closed down while just about 920 scrips managed to close up.
Besides global cues and oil price falling below key USD 60/barrel mark for the first time since July 2009, caution prevailed ahead of the retail inflation and IIP data to be released after trading hours today, traders said.
The BSE Sensex, after rising to 27,692.32 in early trade, succumbed to selling pressure in blue-chips and fell to day’s low of 27,320.05. It settled at a fresh six-week low of 27,350.68, down 251.33 points, or 0.91 per cent.
The index has dropped by a whopping 1104 points in the past week, its worst show since December 2011, during which it fell in four of five trading sessions.
The 50-share NSE index Nifty also plunged 68.80 points, or 0.83 per cent, to close at 8,224.10 after shuttling between 8,216.30 and 8,321.90 intra-day.
“There was weakness across sectors, which was brought about by the global concerns. Markets are concerned about a global slowdown, as reflected in demand from major oil producing organisations. Markets were also cautious ahead of the inflation and IIP data scheduled post-market,” said Dipen Shah, Head- PCG Research, Kotak Securities.
In other BSE sectoral indices, Realty index fell 2.47 per cent, Consumer Durables by 2.28 per cent, Capital Goods by 2 per cent and Metal 1.45 per cent among others.
In the 30-share Sensex pack, as many as 23 stocks closed down. Tata Steel, Sesa Sterlite, BHEL, Bajaj Auto, L&T and HDFC were among big laggards. However, gains in Infosys, Maruti Suzuki and Sun Pharma cushioned the fall.
Small-cap index shed 1.50 per cent and Mid-cap index fell by 1.28 per cent, indicating selling by retail investors.
Foreign funds continue to remain net sellers on the domestic bourses which weighed on the sentiment and added to the selling, equity brokers said. Overseas investors sold shares worth net Rs 808.27 crores yesterday.
Dipen Shah, Head- Private Client Group Research, Kotak Securities
Markets closed the week with losses of about 3-4% on the benchmarks. There was weakness across sectors, which was brought about by the global concerns. Markets are concerned about a global slowdown, as reflected in demand from major oil producing organisations. Markets were also cautious ahead of the inflation and IIP data scheduled post-market. According to media sources, GST bill will now be taken up in the next session of the Parliament. Fiscal reform in and outside the budget will be a major determinant of the market’s movement over the next few weeks and months. Economic growth as well as interest rate movements will be determined by what measures are taken by the Government to put the economy on a high growth path. Globally, developments in China and EU hold the key for the global markets, including India.
View on Rupee
Debopam Chaudhuri, Chief Economist, ZyFin Research
2014 remains a volatile year for the rupee exchange rate, despite some significant recovery in India’s current account deficit. With an expected rise in US interest rate regime, there is a high probability of a significant decline in demand for rupee from FIIs in the short run, leading to further depreciation. In this context, the RBI’s decision to not cut rates may help reduce the volatility in exchange rate until India regains its position as a lucrative investment destination.