Indian Equities Resume Their Losing Run; Investors Poorer By Rs 3.09 Lakh Cr
Indian equities resumed their losing run-on Friday as investor sentiment dwindled ahead of US inflation data slated for release later in the day. From the beginning of the session, benchmark indices were trading in red and later extended their losses in the day.
The 30 share Sensex dropped 1,016 points or 1.84 per cent to end at 54,303 while its broader peer Nifty50 shed 989 points or 1.79 per cent to end at 16,201. The sell-off on Friday wiped Rs 3.15 lakh crore of investor wealth. The total market cap of BSE listed companies slipped to Rs 251 lakh crore.
“The pessimistic mood across several global markets had a rub off effect on local equities as nagging issues like rising interest rate scenario, higher inflation levels and persistent FII selling spooked markets. Bigger concerns of stagnating growth and its effect on corporate earnings going ahead is also making investors nervous, resulting in periodic selloffs,” said Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities.
The US inflation numbers are still expected to be at a four-decade high, which will determine the course the Federal Reserve will take to tame inflation. Investors are cautious about a slowdown on account of aggressive monetary tightening by the Fed.
Another factor affecting investor sentiment has been the rising crude oil prices. While prices cooled on Friday because of fresh restrictions in Shanghai and Beijing, oil prices are still trading at three-month high levels.
On Friday, the rupee also hit a new all-time low of Rs 77.82 per US dollar. The weakening rupee has led global investors to pull money from Indian markets.
Among the sectors which dragged the benchmark indices were financials, IT, metals and energy.
“Indian equity markets ended the week on a negative note. Major key indices and sectoral indices declined during the week. Amid persistent inflation, Central Banks continued with monetary policy tightening. RBI hiked repo rate by 50 bps to 4.9%. European Central Banks decided to end net asset purchases under its asset purchase programme and also signalled towards rate increase in its July monetary policy meeting. Crude oil prices inched up with Brent crude trading above $120 per barrel mark,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Percentage wise Asian Paints was the biggest gainer on BSE Sensex as it gained 0.78 per cent. Other gainers include Dr Reddys Laboratories (0.62 per cent), Ultra Tech Cement (0.52 per cent), Hindustan Unilever (0.14 per cent) and Titan (0.12 per cent).
Kotak Mahindra Bank was the biggest loser as it dropped 3.96 per cent. It was followed by Bajaj Finance (3.90 per cent), HDFC (3.80 per cent), Reliance Industries (3.02 per cent) and Wipro (2.99 per cent).
Overall, the market movement favoured bears with a total of 2010 declines and 1298 advances.
IIFL Finance closed 7.7 per cent higher after it said a unit of Abu Dhabi Investment Authority would invest 22 billion rupees ($282.74 million) in its subsidiary.
Sugar manufacturers also advanced after state fuel retailers agreed to provide monetary relief to sugar mills and other producers of ethanol.
(With Reuters Inputs)
