A negative trend in the global markets, along with a weakening rupee, affected investor sentiment in equity markets, with the benchmark indices falling for the third straight session on Thursday. Continued selling by foreign investors also acted as a catalyst.
The 30-share Sensex lost 572.28 points, or 1.59%, to close at 35,312.13 with all but one constituent ending the day in the red. Maruti Suzuki India, Tata Motors, Yes Bank, Adani Ports, Reliance Industries and ONGC were among the top losers on Thursday.
Oil stock witnessed selling pressure ahead of the OPEC meeting that could result in a possible supply cut. Brent crude, the international benchmark, dropped 2.76% to trade at $59.86 per barrel.
The overall market breadth was also very weak, with more than 1,800 stocks in the red as against 707 gainers on BSE. Further, all the sectoral indices too ended in negative territory.
The broader Nifty closed at 10,601.15, down 181.75 points, or 1.69%.
Kamlesh Rao, managing director and chief executive officer, Kotak Securities, believes that factors like global trade war, Fed rates and Brexit outcomes would set the sentiment of the global economy in 2019.
Poll outcome
According to Mr. Rao, Nifty’s correction in terms of valuation is nearly over and the index could see a potential upside of 16-20% by December 2019 if the election outcome is positive in the form of a single party winning the majority.
In the event of a fragmented mandate or coalition, the Nifty may fall, but still be range-bound between 10,000 and 10,500 points by December 2019, he added.
Elsewhere in Asia, Hang Seng lost more than 660 points, while Nikkei was also down over 400 points. The Dow Jones lost nearly 800 points overnight over concerns of fresh tensions between the U.S. and China after Huawei chief financial officer Meng Wanzhou was arrested in Canada and the U.S. sought her extradition.
FPI activity
Back in India, the recent weakness has also been on account of the selling activity of foreign portfolio investors (FPIs). In the current month, overseas investors have been net sellers at ₹330 crore after having invested ₹5,981 crore in November.
The sentiment in the equity markets spilled over to the currency market, with the rupee plunging 0.62% or 44 paise against the dollar. After opening lower at 70.82, the rupee breached the 71/$ mark to touch 71.14 before closing the day at 70.90.
Incidentally, dollar strengthened against all major currencies after the arrest of Ms. Wanzhou. The strengthening of the dollar also added to the woes of the rupee.
Reuters adds...
Dow sinks 700 points
The Dow Jones Industrial Average was down 708.51 points, or 2.83% at 9.45 p.m. IST slipping back into losses for the year. The S&P 500 was down 69.48 points, or 2.57% and the Nasdaq Composite was down 147.18 points, or 2.06%.
