The Sensex on Thursday saw its biggest single-day fall since February 5, while the broader Nifty posted its worst one-day drop in nearly two years as investors remained concerned about a weakening rupee and rising crude oil prices. Both the indices fell to their lowest closing levels in nearly three months. While the Sensex plunged 953.51 points before settling at 35,169.16, down 806.47 points or 2.24%, the Nifty ended the session at 10,599.25, down 259 points, or 2.4%. With Thursday’s fall, the Nifty has given up most of its gains in 2018 so far and is about 68 points away to yield negative returns for the year.
The Nifty Energy index slid 6.14% on Thursday, its biggest fall since August 2015, led by oil refiners after the government cut excise duty by Rs 1.5 per litre and asked state-run OMCs to absorb another Rs 1 on the sale of petrol and diesel. While the Nifty Pharma fell 3.2%, the Nifty IT and Nifty FMCG declined 2.9% each. Three of the sectoral indices — Nifty Auto, Nifty Realty and Nifty MNC — hit their 52-week lows on Thursday.
At 10,599.25, the benchmark Nifty50 has given a negative return of 12.6% in dollar terms since January, while the S&P 500 has risen by 9.4% over the same period. The index has remained in the green in rupee terms thanks to the outperformance of just a handful of stocks. The broader market has underperformed, with the Nifty Midcap losing 20.8% and the Nifty Smallcap giving up close to 33.4% between January and now. What’s more, nearly 80% of all stocks with a market capitalisation of Rs 1,000 crore and above have been trading in the red since the beginning of 2018. Moreover, almost half of these 733 stocks have lost more than a quarter of their value so far in 2018.
Meanwhile, provisional data from bouses showed foreign fund managers sold equities worth $375.2 million in the cash segment on Thursday, taking their four-day sales to $1 billion. The poor breadth of the market has probably kept foreign portfolio investors (FPIs) away. So far in 2018, the overseas investors have pulled out Indian equities worth $3.04 billion. Barring July, FPIs remained net sellers every month since April. However, domestic institutions have been buyers to the tune of $12.7 billion.