The headline indices Sensex and Nifty slumped for the third consecutive session on Thursday, even as investors keenly await a stimulus from the government amid growing domestic slowdown and global concerns.
The headline indices Sensex and Nifty slumped for the third consecutive session on Thursday, even as investors keenly await a stimulus from the government amid growing domestic slowdown and global concerns. The Sensex closed 587 points down to hit a fresh 5-month low of 36,473 while the Nifty ended below the 10,750-mark. Shares of Yes Bank, VEDL, Bajaj Finance, Tata Motors, ONGC were among the biggest losers shedding more than 4% each. Tech Mahindra (1.54%), TCS (1.33%), HUL (1.03%), HCL Tech (0.60%) were the only stocks ending in the green in the Sensex pack.
Taking stock of the ongoing plunge, Vivek Ranjan Misra, Head of Fundamental Research, Karvy Stock Broking said that the market still awaits clarification on the tax proposals for FPI’s made in the budget. “Secondly the market is getting impatient with regards to the prospects of a stimulus package from the government and the comments made by some government officials have dimmed hopes. We continue to expect some weakness in the near term, but expect the economy to stabilize in Q2 FY2019-20 and recover in the second half,” he said.
Earlier, Chief Economic Adviser Subramanian’s comments practically ruling out a stimulus package for the economy had weighed on investor sentiment. “If we basically expect the government to use taxpayers’ money to intervene every time when there are some ‘sunsets’, then I think you introduce possible moral hazards from ‘too big to fail’ and as well as the possibility of a situation where profits are private and losses are socialised,” Subramanian said at an event.
Ajit Mishra Vice President, Research, Religare Broking said that the recent fall is a result of growing uneasiness among the participants as they’re keenly awaiting some action from the government to boost the market sentiment. Besides, feeble global cues are further adding to the negativity. “Nifty has now reached closer to its immediate and critical support of 10,750 so we may see some consolidation or pause ahead. We suggest continuing with “sell on rise” approach and focusing more on stock selection now,” Mishra said. Meanwhile, the domestic currency rupee depreciated 33 paise to 71.88 against the US dollar.