The headline indices Sensex and Nifty registered their third biggest intra-day fall in 2019 on Friday, even as FPI taxes and tepid Q1 earnings spooked investor sentiment.
The headline indices Sensex and Nifty registered their third biggest intra-day fall in 2019 on Friday, even as FPI taxes and tepid Q1 earnings spooked investor sentiment. Notably, the 30-share Sensex plunged ended more than 560 points down to 38,337.01, while the Nifty ended at 11,419, down 178 points. The index hit an intra-day low of 38,271.35 and a high of 39,058.73, swinging 787 points. M&M, Bajaj Finance, Tata Motors, Hero MotoCorp, IndusInd Bank, Yes Bank, Bajaj Auto, Kotak Bank, SBI and ICICI Bank were among the top losers, dropping up to 4.36%. Billionaire Mukesh Ambani-led RIL closed 1.01 per cent lower ahead of its quarterly results. Bank stocks were among the biggest losers, as the Nifty bank index ended 660 points lower to fresh two-month lows.
Taking stock of the volatile session, Ajit Mishra Vice President, Research, Religare Broking noted that continuous FPI outflow, geo-political tension and between the US and Iran and anxiety around the earnings weighed on the investor sentiment. “Mostly sectoral indices traded in line with the benchmark index and ended deep in red. “Markets are facing headwinds from both domestic and global front and might take further beating in following sessions. We advise keeping cautious approach and preferring hedged positions instead of naked trades. Nifty has next major support at 11,300,” he said.
Mustafa Nadeem CEO Epic Research told Financial Express Online that a lot of factors including worries around a slowing economy on muted sales of consumer goods, lower rainfall in major crop producing areas, US China trade war, and tepid earnings also dampened investor appetite. “Volatility index saw a sharp jump due to which sentiments turned completely negative. Bearish flag break down was seen in early trade which indicates a bearish continuation pattern,” he said.
Notably, foreign investors have turned bearish on India on concerns of the increased taxation after Union Budget 2019. Replying to a debate on increased taxes on HNIs, FM Nirmala Sitharaman said individuals earning more than Rs 2 crore will not impact FPIs provided they organise themselves as a company. On a net basis, foreign institutional investors sold equities worth Rs 1,404.86 crore on Thursday, while domestic institutional investors purchased shares to the tune of Rs 329.05 crore, provisional data available with stock exchanges showed.