Indian markets today logged their biggest drop in 2 months with BSE benchmark Sensex tanking 604 points to close below 29,000 mark and the Nifty index slipped 181 points to fall below 8,800 level on fears that an earlier-than-expected rate hike by US will hit fund inflows.
It was a sea of red in domestic markets today. Nearly 1900 shares on the BSE fell while less than 1,000 managed to rise.
Banking, power, capital goods, realty, metal, IT, oil&gas, auto and FMCG shares reported sharp losses. Only pharma stocks managed to buck the extremely negative trend on bourses.
Furthermore, weakness in the rupee, which depreciated to 62.58 intra-day at forex markets weighed on the sentiments.
Asian investors today followed US peers, who ran for the exit on Friday after Labour Department said unemployment fell to 5.5 per cent in February, the lowest level since May 2008.
Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities
Markets were weak today largely on the back of the concerns over US interest rate hikes. There are concerns over liquidity flows into India and other emerging markets, when US actually increases interest rates.
Markets are awaiting the developments in the Parliament where important bills are lined up to be passed. Further progress on the fiscal reforms is needed to provide the much-needed confidence to the markets over future growth rates.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
As we were seeing last week, smart liquidity was shifting towards defensive sectors. This shift was largely seen towards FMCG and Pharma stocks. Today we have seen the sharp cut of this early trend, hence this trend is likely to stay for some more time. Post Union budget and RBI rate cut, Indian market is currently deprived of news. The next momentum will depend on Budget Session where expectation is high. In the mean time market has looked at global concerns on the US rate hike and negative development in Grexit.
Market Wrap Up by Mr. Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
The markets today witnessed heavy sell-off on the back of weak global cues and weak Rupee. The global markets were down on the concerns that the Federal Reserve may increase its interest rates on the basis of strong US jobs data. Today once the Nifty moved down below 8800, the psychological support, made the indices to drift further lower.
Nifty closed at 8756 down around 181 points. The market breadth turned negative as there were seen 982 stocks advancing against 1883 stocks declining. The Nifty volatility index, India VIX stood at 15.8125 up around 9.52%.
The Mid cap and small cap indices closed lower, down around 1.33% and 0.94% respectively.
Barring the Healthcare sector which closed up around 0.41%, all other sectors ended lower. The major losers in the list were Banking and power which closed lower around 3.14% and 2.99% respectively.
In the stocks’ front, selling was seen in SSLT and Hindalco, closed down around 5.62% and 5.06% respectively and on the other end the buyers were Jindal Steel and HUL which closed up around 4.56% and 3.44% respectively.
The FIIs were net buyers in the capital market segment, bought shares worth Rs 79.84 crore on Thursday, 05 March 2015. On the other hand the DIIs were net buyers on 05 March 2014, sold shares worth Rs 193.54 crore as per the provisional data from the stock exchanges.
The European markets fell tracking the US markets and the US index futures were also down.
The jobs data, which follows a slew of other positive indicators, triggered speculation the US Federal Reserve will lift rates from near-zero as early as summer, say brokers.
The BSE 30-share Sensex resumed with a gapdown and moved southwards to break 29,000-mark to a low of 28,799.76 before concluding at 28,844.78 — a net loss of 604.17 points, or 2.05 per cent. This is its worst daily drop since January 6.
As many as 26 out of 30 Sensex-based scrips closed in the red with the biggest loser being Sesa Sterlite that over 5 per cent, followed by Hindalco 4.70 per cent. TCS fell about two per cent after the company said it sees revenues in March quarter to be in line with trends in same period last year.
“…markets fear rate hikes by Fed backed by reviving growth and better than expected jobs numbers,” said Bonanza Portfolio, Senior Vice President, Rakesh Goyal.
The 50-issue NSE Nifty dipped below the 8,800-level by tumbling 181 points, or 2.03 per cent, to 8,756.75. Intra-day, it shuttled between 8740.55 and 8891.30. Today’s loss was also Nifty’s biggest drop since January 6 when it fell 251 points.
Sectorwise, the BSE Bank index suffered the most by falling 3.01 per cent, followed by Power (2.93 per cent), Capital Goods (2.74 per cent, Realty (2.58 per cent) and Metal (2.40 per cent) among others. However, the Healthcare index ended 0.30 per cent higher.
In tandem with overall trends, the BSE Mid-cap index fell by 1.30 per cent and Small-cap index lost 0.92 per cent.
Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 79.84 crore last Thursday. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 193.54 crore, as per provisional data.