Ignoring sharp fall in current account deficit and positive global cues, the benchmark BSE Sensex today plunged by 470 points to a fresh near eight months low of 26,370.98, while Nifty cracked the 8,000-level.
Sentiment was hit by monsoon making marginal progress and caution ahead of macro data — IIP for April and CPI for May.
Brokers said participants preferred to book profits in stocks that rebounded in previous session.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Since the last week of May, markets have consolidated down except for the recent positive movement seen on account of MSCI’s decision. Today, we have seen profit booking along with reaction towards poor macro numbers. Confidence is poor and we believe market is yet to rationalize earnings growth outlook for FY16/17. Given we have breached 8000 levels, we would test 7800 levels. Tomorrow we await May CPI numbers and consensus stands at 5% YoY vs 4.87% in April.
Yesterday, RBI had said that Current Account Deficit fell sharply to its lowest level in a year at USD 1.3 billion or 0.2 per cent of GDP in the fourth quarter of 2014-15.
Following this, the 30-share gauge resumed strong today and hit the 27,000-mark to touch day’s high of 27,000.14.
However on emergence of profit-booking it slumped to 26,348.93 before closing 469.52 points or 1.75 per cent down at 26,370.98, its weakest closing since October 17, last year.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
After a positive start the markets fell on the back of profit booking. Nifty breached the crucial support level at 8000 today, and it is likely to remain weak until foreign investor stays side lines. The market mood was cautious due to delayed monsoon and FII sales.
For Indian markets, inflation data and balance of trade will be the main triggers for tomorrow.
Nifty today closed at 7965 down around 159 points. The market breadth turned to negative from positive as there were seen 790 stocks advancing against 1847 stocks declining. The Nifty volatility index, India VIX stood at 17.8050 up around 4.25%.
The mid-cap index and small cap index closed down around 1.78% and 1.55% respectively.
All the sectors ended in red and the major ones in the list were Auto and Banking which ended down around 2.37% respectively.
In the stocks’ front, the major losers were Tata Power and Idea which closed down around 5.08% and 4.90% respectively whereas the buying was seen in Vedanta and Tech Mahindra closed up around 1.38% and 0.25% respectively.
The FIIs were sellers in the cash market segment on 10 June 2015, Wednesday, sold shares worth Rs 482.11 crore. The DIIs on the other hand were buyers on 10 June, bought shares worth Rs 788.06 crore in the capital markets segment.
The European markets were up as Greece continued its talks with its creditors for a debt deal. The US index futures were trading mixed.
Yesterday, the index had jumped 359.25 points or 1.36 per cent on value-buying as MSCI deferred inclusion of China A shares in its index keeping India weightage intact.
The broader NSE Nifty slipped below the important 8,000 and finally settled 159.10 points or 1.96 per cent lower at 7,965.35. Intra-day, it moved between 8,163.05 and 7,958.25.
Stocks of Tata Power suffered the most among Sensex pack by falling 4.88 per cent, to Rs 70.15, followed by Tata Motors by 3.61 per cent to Rs 430.35.
Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Judging from the market’s reaction to both the decision as well as to the deferment of the decision of Global index provider MSCI to include of China A shares in its global benchmarks, it is obvious that markets has concerns that this could lead to a lower relative representation to India’s stocks, and thereby reduce inflows into such stocks. But such perceived impact could be short term and limited. S&P’s lowering of Greece’s credit rating is not unexpected, given the uncertainty over a resolution of debt payment. Thursday’s penetration of Nifty’s 8000 mark is suggestive that domestic event risks continue to dominate Indian markets in the short term, and to this end, the progress of monsoons, and Friday’s inflation data would be keenly watched.
Shares of Tata Steel fell 2.34 per cent, to Rs 298.80 after UK unions notified the company of an industrial action on June 22 over the firm’s proposal to revise the British Steel Pension Scheme (BSPS).
Of 30-Sensex stocks, 29 stocks ended lower, while Vedanta finished in positive zone.
Tracking overall trend, broader market also depicted a subdued trend with the mid-cap and small-cap indices ending 1.78 and 1.55 per cent down, respectively.
Sectorally, the BSE bankex fell the most by losing 2.37 per cent, followed by auto 2.37 per cent, power 2.31 per cent, consumer durables 2.03 per cent, realty 1.96 per cent and capital goods 1.80 per cent.
Asian markets ended higher, while European indices were trading in positive zone in their morning trades.