The headline indices Sensex and Nifty registered one of their biggest declines in the calendar year, as financial and IT heavyweights dragged amid ongoing global sell-off. The Sensex closed 624 points down at 36,958.16 while the Nifty closed below the 10,950-mark. Shares of Yes Bank (10.35%), M&M (6.11%), Bajaj Finance (5.72%), Bharti Airtel (5.28%), HDFC (5.07%), Maruti Suzuki (4.72%), Tata Steel (3.85%) and L&T (3.73%) were among the biggest losers. Notably, HDFC twins, Infosys, ITC, ICICI Bank together contributed to a 544 point fall in the Sensex. Shares of Mukesh Ambani led Reliance Industries registered their biggest rise in a decade, ending nearly 10% higher after RIL made a slew of disruptive announcements, including a plan to make the firm a zero net debt company in next 18 months.
Interestingly, despite RIL’s stellar rise, the 30-share Sensex saw one of its worst declines since January. Sharing top reasons for the plunge, investment advisor Sandip Sabharwal said that the overnight volatility in the Argentinian assets combined with ongoing issues in Hong Kong as it created negative global cues along with the crash in the US Markets.
“On top of that no concrete steps have been taken by the government to address the slump in the economy. This exaggerated the fall despite the Reliance deal,” Sabharwal told Financial Express Online. Asian markets were spooked and ended significantly lower amid global trade war concerns and increasingly violent demonstrations in Hong Kong. The Hang Seng plunged 2.10%, Shanghai Composite Index fell 0.63%, Kospi 0.85% and Nikkei ended 1.11% lower.
According to technical analyst Milan Viashnav, if the up move in Reliance is discounted, Nifty would closed 250 points lower. “Having said this, the main reason for today’s plunge is the weakness that started to dominate the markets on Friday itself when the Nifty halted its technical pullback near the 200-DMA and retraded from there. The negative newsflows aided the downside but the reason has remained largely technical in nature,” Milan Vaishnav, CMT, MSTA Consulting Technical Analyst at Gemstone Equity Research & Advisory Services told Financial Express Online. Notably, the auto stocks registered a fall after SIAM reported that automobile sales in India witnessed its sharpest decline in nearly 19 years in July. Meanwhile, the Indian rupee is trading 49 paise lower at 71.27 against the US dollar.