By Siddhant Mishra
The benchmark indices declined on Friday amid a sell-off in tech, realty, and metal stocks, as investors rushed to book profits.
The Sensex shed 389.01 points, or 0.62%, to end at 62,181.67, while the Nifty50 closed at 18,496.60, down 112.75 points or 0.61%.
IT stocks slumped the most after Credit Suisse in a note warned of a correction in valuations, saying that the current valuations were not sustainable owing to a worsening outlook on the US economy. The country, which is the largest market for Indian IT majors, is headed towards recession on the back of aggressive tightening by the US Fed.
HCL was the biggest loser, with the stock crashing 6.72% after the company said furloughs and spending cuts by clients in the US market could hinder revenue outlook for the firm.
Mphasis and Tech Mahindra shed 3.98% and 3.58%, respectively. Infosys, Wipro and TCS all ended the session in the red. The BSE Teck index declined by 2.46%.
Consumer stocks, however, witnessed buying as Nestle topped with gains of 2.24%, while ITC and HUL also rose.
Tech stocks were also the top five losers on the NSE, with HCL plunging 6.5% and Tech M losing 3.58%. Infosys, Wipro and TCS were the next biggest laggards. Nestle was the top gainer at 2.3%, with ITC, HUL and Britannia closing in the green.
A total of 1,134 stocks advanced on the BSE while 2,391 stocks witnessed decline.
“Domestic indices pared early gains despite strength in global peers. Weak November MF inflow data and the downbeat outlook by HCL Tech led to some profit booking. Buying was seen in FMCG, pharma and banking stocks.
“The IT sector saw a sharp decline after HCL Tech said it expects FY23 revenue growth to be at the lower end of its 13.5%-14.5% guidance due to furloughs and drop in spending in some sectors. The US PPI data to be released later on Friday and the US CPI data on December 13 will be keenly watched as they could influence the Fed’s interest rate decision. FIIs remained net sellers (`5,500 crore) so far in December (baring one day) and added to the overall pressure in the market.
“We expect weakness in tech stocks to continue on account of weak growth outlook; FMCG stocks are expected to do well on the back of the fall in commodity prices and improving demand,” said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services.
DIIs were net buyers to the tune of `501.63 crore, while FIIs turned net sellers of up to `158.01 crore.
Among global indices, the Hang Seng was up 2.32%, the Nikkei gained 0.4% and the Straits Times index rose 0.31%. The Shanghai Composite edged up 0.30% while the KOSPI gained 0.76%.
Meanwhile, international oil benchmark Brent crude rose 0.05% to $76.19 per barrel.
The rupee appreciated by 10 paise to close at 82.28 against the US dollar on Friday, tracking the weakening of the American currency in the overseas market.
Flows in the mutual fund industry through systematic investment plans or SIPs route rose to an all-time high of `13,306 crore in November, reflecting the growing maturity and confidence of investors.
However, inflow in equity mutual fund schemes plunged 76% to `2,258 crore in November from `9,390 crore in the preceding month, data released by Association of Mutual Funds in India (Amfi) showed on Friday.