The benchmark BSE Sensex dropped for the sixth day today to record its longest losing run in four months as foreign funds continued to offload shares on fears that below normal rains will result in higher inflation.
With today’s 41.84 points drop, the 30-share barometer has plunged around 1,370 points, or 4.91 per cent, in six days.
The market is on a downward spiral since last Tuesday when Reserve Bank had cut repo rate by 25 bps, despite flagging concerns over economic recovery.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Market continues to be above the crucial level of 8000 ahead of MSCI’s decision on whether to include China A shares in the EM index. This will be decisive in telling us if the market is likely to breach to lower levels. That said, our market is yet to rationalize on FY16/17 earnings growth expectation post a disappointing FY15 and government spending still abating us. However, the bull market is still intact and this is a good time to be in consolidate and strategy should be to add on dips as support evolves in the global and domestic market.
On the same day, the Met department had forecast monsoon to be deficient this year, triggering drought fears.
Falling for the seventh straight day, the broad-based NSE Nifty today fell by 21.75 points or 0.27 per cent at 8,022.40.
Negative sentiment was compounded by China’s potential inclusion in the MSCI Emerging Market index that may result in further foreign fund outflows from India.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Nifty continued to remain under pressure tracking the global cues. Concerns of a possible rate hike in US and Greece debt crisis affected market sentiments negatively. At present there is no positive trigger, most of the news flows from international markets and from the domestic front also are not supporting the market.
Nifty today opened at 8026, made an intraday high and low of 8057 and 8005 respectively and finally closed 8022 down around 21 points. But the market breadth turned to negative as there were seen 1060 stocks advancing against 1575 stocks declining. The Nifty volatility index, India VIX stood at 18.0100 down around 4.63%.
The mid-cap index and small cap index closed down around 0.39% and 0.40% respectively.
In the sectorial front, the major losers were Realty and Healthcare which ended down around 1.58% and 1.49% respectively. On the other end, the buying was seen in Consumer Durables and Metal which ended up around 1.23% and 0.66% respectively.
In the stocks’ front, the major losers were Cairn and Cipla which closed down around 4.34% and 3.95% respectively whereas the buying was seen in VEDL and Hindalco closed up around 2.32% and 1.40% respectively.
The FIIs were sellers in the cash market segment on 08 June 2015, Monday, sold shares worth Rs 749.12 crore. The DIIs on the other hand were buyers on 08 June, bought shares worth Rs 529.82 crore in the capital markets segment.
The European markets were trading lower. The US index futures were also down.
In volatile movements, Sensex shuttled between 26,438.32 and 26,604.65 during the day and finally ended 41.84 points or 0.16 per cent lower at 26,481.25.
This is the fresh lowest closing in nearly eight months.
Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
While Nifty opened on a negative note for the seventh straight day, banking stocks pushed higher as RBI approved Strategic debt restructuring empowering banks to take control if borrowers default. However it remains to be seen if securitisation will find buyers. Possibilities that MSCI may include China’s A shares in MSCI EM index also weighed on the sentiments, due to the possibility that India’s weightage in the index would be reduced and thus affect capital flows. China continued to remain in the headlines as data showed that factory prices sank in May extending the decline for several consecutive months, improving chances of stimulus.
In February, the BSE benchmark had fallen for seven days on the trot, when RBI had maintained status quo on interest rates in its monetary policy review on February 3.
With a slump of up to 3.35 per cent, Cipla was the top loser among Sensex and Nifty stocks today.
Bucking the trend, shares of Vedanta topped the gainers by climbing 3.11 per cent amid speculations of Cairn India merging with itself.
Shares of Nestle India, after remaining under pressure for the four straight sessions, emerged surprised winner today trading largely on the back of value-buying and climbed 7.47 per cent to close at Rs 5,953.80.
Market View by Gaurav Jain, Director, Hem Securities
Markets continue its southward journey in line with the Foreign portfolio investor sell off. Fears of lowering of weightage of India on the MSCI index also spooked the sentiment. Tough Nifty manage to hold the key psychological level of 8000.
Sectorwise, BSE realty index suffered the most by falling 1.54 per cent, followed by Healthcare 1.41 per cent, auto 0.73 per cent, IT 0.70 per cent, capital goods 0.35 per cent, Oil&Gas 0.04 per cent and FMCG 0.03 per cent.
Meanwhile, foreign investors sold shares worth Rs 749.12 crore yesterday as per provisional data released.
In overseas markets, Asian stocks ended down, while European markets were trading lower in their morning session.