Benchmark indices continue to slide as stimulus hopes dim

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Published: August 23, 2019 2:53:58 AM

With more than 100 companies of BSE500 stocks hitting 52-week lows on Thursday, the number of stocks hitting one-year low has surged to a whopping 2,471 between July 1 and now.

market, market news, Nifty50, Nifty, sensex, FPI,  foreign portfolio investors, Bank Nifty, foreign investment, With more than 100 companies of BSE500 stocks hitting 52-week lows on Thursday, the number of stocks hitting one-year low has surged to a whopping 2,471 between July 1 and now. (Reuters)

The Nifty50 extended its fall for the third day, having erased the entire gains for the year, as investor concerns over chances of economic stimulus and lack of visibility in revival of corporate earnings continued to amplify. While the Sensex slumped 587.44 points, or 1.6%, to close at 36,472.93, the broader Nifty fell 177.35 points to end the session at 10,741.35 — its lowest level in the past six months.

The Bank Nifty gave up another 684.85 points to close at 27,034.20 on Thursday. The gauge for bank stocks ended in red for the fourth day, having pared 4.2% of value during the same period.

Meanwhile, foreign portfolio investors (FPIs) continued to sell stocks, offloading shares worth $3.4 billion since July. Provisional data from the exchanges showed FPIs sold around $126 million worth of stocks on Thursday.

The broader market has been in bearish mode for more than six quarters now; the number of companies with a market capitalisation of Rs 1,000 crore or more has fallen to 682 as on Thursday from the peak of 853 in Q3FY18. That’s despite the fact that FPIs were buyers in every month between February and June, and indicates that the benchmark indices have been held up by the rise in just a bunch of stocks, masking the weakness in the rest of the market.

With more than 100 companies of BSE500 stocks hitting 52-week lows on Thursday, the number of stocks hitting one-year low has surged to a whopping 2,471 between July 1 and now.

Nifty Realty slid 6.2% to clock its biggest single-day drop in one-and-a-half years after a media report suggested that the Supreme Court had issued a notice to the real estate developer for allegedly suppressing material information from shareholders.

While the stock of largest developer by market capitalisation, DLF plunged 15.8%, Indabulls Real Estate, Oberoi Realty and Sunteck Realty fell over 5% each.

Net profit for a sample of 2,179 companies grew at a moderate pace of 5.9% in Q1FY20, compared to 9.5% in Q4FY19 and over 18% for the quarter ended December 2018, data sourced from Capitaline showed. The market breadth, indicating the overall health of the market, was tilted towards the losers over the last one year. On Thursday, 1,518 stocks declined on the NSE, compared with 348 stocks advancing, and 78 remaining unchanged. On the BSE, 1,975 stocks were in red against 511 closing higher.

The negative sentiment rubbed off on most sectoral indices on Thursday. Of the 19 sectoral indices compiled BSE, all barring BSE IT and BSE Teck were in the red with BSE Realty losing as much as 6.01%, followed by BSE Metal (3.5%) and BSE Finance (2.7%).

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