Defensive stocks led the decline, with TCS, ITC, HUL and Infosys contributing more than half to the Sensex fall of 330 points.
The surge in the benchmark indices was halted on Friday, with global ratings agency Moody’s lowering India’s outlook to ‘negative’ from ‘stable’, citing concerns over economic growth and increasing fiscal slippages. While the Sensex settled at 40,323.61 points, down 330.13 points (0.81%), the Nifty closed 103.90 points lower at 11,908.15 points. Investors lost Rs 1.6 lakh crore on Friday, the first such erosion in market capitalisation since October 1. The market capitalisation of the BSE stood at Rs 152.72 lakh crore.
Defensive stocks led the decline, with TCS, ITC, HUL and Infosys contributing more than half to the Sensex fall of 330 points. The heavyweight Bank Nifty closed 116.25 points higher at 30,749.40. The rating agency believes that the government will face very significant constraints in narrowing the Budget deficit and preventing a rise in the debt burden. Moody’s now expects the government deficit of 3.7% of the GDP for FY20.
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FPIs bought shares worth $131 million on Friday, taking their November purchase so far to $757.6 million. Overseas investors bought Indian equities over $3 billion in September and October. On the other hand, domestic institutional investors including mutual funds sold shares worth $ 643.8 million since November 1.
The market breadth, indicating the overall health of the market, has been tilted towards the losers for nearly two years. On Friday, 1,133 stocks declined on the NSE, compared with 684 stocks advancing, and 114 stocks remaining unchanged. On the BSE, 1,502 stocks ended in the red against 1,023 stocks closing higher. Of the 19 sectoral indices compiled by the BSE, all barring three ended the day in red with FMCG, healthcare, metal and oil & gas losing 1.7% each.