Stocks declined nearly 2% on Friday amid a global sell-off ahead of the US inflation data, which will decide the Federal Reserve’s course of action. A widespread sell-off in technology and banking stocks dragged the Sensex and Nifty down by 1.8% and 1.7%, respectively, resulting in the first weekly loss in four weeks. Out of the six previous sessions, Nifty ended in the red in five, mainly tracking global cues. Investor wealth to the tune of Rs 3.1 trillion was wiped out on Friday, taking the cumulative loss over the last six sessions to Rs 7.14 trillion. The combined market capitalisation of all the listed firms on the BSE stood at Rs 251.84 trillion as of Friday’s closing.
The weakness in rupee and the surge in crude oil prices also remained key negatives for the Indian equities, said market watchers. On Friday, the rupee tumbled 19 paise to close at a fresh lifetime low of 77.93 against the US dollar amid a retreat in equities on the back of persistent selling by FPIs. The local currency has lost 4.5% so far in 2022. The Brent hardened and has been trading above $123 per barrel in the last three sessions.
After a gap-down opening, the Sensex ended lower by 1,016.84 points at 54,303.44 – with 22 of its constituents ending in the red. Heavyweight Reliance Industries contributed 258 points to the Sensex’s fall, which was followed by HDFC (138 points) and Infosys (121 points). The Nifty-50 ended lower by 276.30 points at 16,201.80.
The fall in the broader markets was comparatively lower than the benchmarks, as the BSE mid-cap and small-cap indices fell by 0.6% and 0.7%, respectively. All sectoral indices ended in the red, with oil & gas, IT and financial services declining more than 2% each.
“Depreciating rupee, high crude oil prices and consistent FIIs selling remain key negatives on the domestic front. Market is stuck in a broader range for the last one month, which is expected to continue until any clear direction emerges on either side. While declines are being bought into – support is missing at higher levels,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services.
Foreign portfolio investors continued their selling streak. According to provisional data available on the exchanges, FPIs sold shares worth Rs 3,973.95 crore on Friday, while domestic institutional investors bought equities worth Rs 2,831.07 crore. So far this month, FPIs have sold shares worth $2.2 billion, according to Bloomberg.
Elsewhere in Asia, barring China’s Shanghai Composite, all major indices ended lower, with India being the worst performer. Japan’s Nikkei 225 ended lower by 1.5%, while Hang Seng declined 0.3%.