Belying a promising start, the markets on Tuesday fell for the second consecutive day and saw all its early gains go up in smoke as the benchmark BSE Sensex lost 47 points after Moody’s slashed India’s GDP forecast to 7 per cent.
Cautioning against growth risks, Moody’s Investors Service lowered its India growth forecast for this fiscal to 7 per cent from 7.5 per cent earlier, citing below-par rainfall.
The market performance was weighed down by heavy selling in bluechips such as HDFC, Lupin and Sun Pharma.
The monsoon deficit was another sticking point for investors, which widened to 10 per cent as El Nino phenomenon gathered steam.
A sharp correction in Chinese stocks amid concerns over the country’s financial health gave bears an upper hand. The BSE metal index fell close to 2 per cent on fears that China’s economy may be losing ground.
Reclaiming the 28000-mark in early trade, the Sensex hit a high of 28040.73, but failed to latch on to gains as it settled at 27831.54, a fall of 46.73 points.
The 50-share NSE Nifty remained lacklustre too, which dropped 10.75 points to close at 8466.55.
“Domestic indices slipped after a positive opening on the back of a fall in the Chinese markets and on the news of Moody’s reducing the country’s GDP forecast,” said Alex Mathews, Head, Research, Geojit BNP Paribas Financial Services. The bear grip was in full display as 22 out of the 30-share Sensex pack ended in the red.
