Weak cues drag markets, Sensex tanks 401 pts

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Mumbai: Indian markets saw a huge fall end of day Wednesday, July 8 following weak cues from Asian and European markets coupled with profit booking by retail investors and strong selling from the foreign institutional investors (FII). Benchmark equity indices in 13 of 16 major emerging markets fell on Wednesday and all the developing- nation currencies except Thailand’s baht and the Philippine peso weakened against the dollar. The MSCI emerging markets index lost 1.4% to touch 740.57 at mid-day in London, the lowest level in two weeks.

Dealers in the bourses say that domestic markets were overdue for corrections as it had surged ahead after the elections results in May but the past few days global sentiments also had negative impact on the market.

The 30-share Sensex of Bombay Stock Exchange (BSE) closed lower by 401.30 points or 2.83% finally closing at 13,769.15 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) ended the day at 4,078.90 points down by 123.25 points or 2.93%. According to provisional data available at the BSE, overseas investors have sold (net) around Rs 2,588 crore equities in the month of July. Moreover, Wednesday was the third straight day when the overseas investors were net sellers of equities worth Rs 828 crore. Domestic institutions meanwhile have been net buyers to the extent of Rs 2,634 crore in the month of July and have been providing support to the market.

Manish Sonthalia, fund manager at Motilal Oswal securities said, “The lack of any major announcements to the market from the budget and weak global cues were the major reasons for the indices to go down so sharply. In the coming days too, I think markets are likely to remain in the ‘range-bound manner’ as there are no major cues expected which can have major impact on the markets.”

Domestic markets opened the day with ‘negative gap’ tracking unfavourable cues from the global markets. The benchmark indices remained volatile during the intra-day trading. However, reports of government having disinvestment plans in the next three months had some revival in the markets. But intense selling during the final hours led the markets to end the day in deep red.

Insurance companies did some buying during trading sessions. As per provisional figures by BSE, domestic institutional investors (DII) were net buyers at Rs 594.07 crores while FIIs continued selling and were net sellers at Rs 828.01 crores.