Both the Sensex and the Nifty50 tested their lowest levels in six months after a tumble in US equities sparked sell-off across the globe on Thursday with the benchmark Sensex shedding as much as 1,037.36 points in intra-day trade.
While the Sensex ended the session at 34,001.15 points, the broader Nifty closed at 10,234.65 points. Both the indices were down by 2.2% each with almost all constituents of the index in the red except oil companies which were up tracking fall in global crude oil prices, government’s statement that they will not ask oil marketing companies to further subsidise petrol and diesel prices.
The Brent crude which is hovering at $81.5 per barrel has declined about 4% in the last two days.
Meanwhile, the foreign portfolio investors (FPIs) remained net sellers for the last nine sessions offloading equities worth nearly $2.5 billion. Overseas investors sold shares worth $387 million in the cash segment on Thursday, provisional data from stock exchanges showed. The recent sell-off by FPIs have taken their year-to-date sale tally to $4.4 billion. This compares with a net purchase of $8.01 billion in 2017. On the other hand, the domestic institutional investors (DIIs) bought shares worth $13.9 billion so far this year.
The massive sell-off in domestic stocks on Thursday wiped off Rs 2.7 lakh crore of investor wealth, taking the value of market cap eroded to `23.6 lakh crore since September. The market value of BSE-listed companies stood at Rs 135.7 lakh crore on Thursday.
The Dow Jones Industrial Average fell 831 points or 3.15% on Wednesday — its worst loss in eight months — as fears of slowing economic growth and rising interest rates spook investors.
The yield on the benchmark 10-year treasury note was trading at 3.18% after hitting a high of 3.23% on October 5.
Shares of Asian markets sank with Taiwan TAIEX losing as much as 6.3%, followed by Shanghai Composite which is down by 5.2%. While Japan’s Nikkei declined 3.9%, Hang Seng slid 3.5%.
At 10,234.65, the benchmark Nifty50 has given a negative return of 16.3% in dollar terms since January, while the S&P 500 has risen by 4.2% over the same period. With Thursday’s fall, the index is down by 2.8% in rupee terms so far this year. The broader market has underperformed, with the Nifty Midcap losing 23% and the Nifty Smallcap giving up close to 36% between January and now.
What’s more, about 81% of all stocks with a market capitalisation of `1,000 crore and above are trading in the red since the beginning of 2018. Moreover, over half of these 730 stocks have lost more than a quarter of their value so far in 2018.
Widespread selling pulled down all sectoral indices with Nifty Auto, and Nifty Realty plunging to their 52-week lows. On Thursday, Nifty PSU Bank fell the most with a loss of 5.2%, followed by Nifty Metal which was down by 3.8%. While Nifty IT slid 3%, Nifty Pharma and Nifty Financial Services fell 2.8% each.