Sensex, Nifty fall for 3rd day as U.S. rating downgrade triggers global equity sell-off

The 30-share BSE Sensex fell by 542.10 points or 0.82% to settle at a four-week low of 65,240.68

August 03, 2023 05:34 pm | Updated 05:34 pm IST - Mumbai

Image used for representative purpose only.

Image used for representative purpose only. | Photo Credit: PTI

Benchmark Sensex tanked 542 points to settle at a four-week low while Nifty closed below the 19,400 mark, extending their losses for a third straight day on Thursday in tandem with a bearish trend in global markets following the U.S. rating downgrade.

The 30-share BSE Sensex fell by 542.10 points or 0.82% to settle at a four-week low of 65,240.68. During the day, it slumped 819.7 points or 1.24% to 64,963.08.

The NSE Nifty declined below the 19,300 mark in intraday trade before paring some of the losses to close at 19,381.65, still down by 144.90 points or 0.74%. It moved in a range of 19,537.65 to 19,296.45 in day trade.

In three days of losses, Sensex plunged by around 1,287 points or 2.16% while Nifty has tanked 372 points or 2.42%.

"Global markets are still grappling with the impact of the U.S. rating downgrade, with spiking bond yield and strengthening dollar index," Vinod Nair, Head of Research at Geojit Financial Services said.

Fitch Ratings lowered the U.S. government credit rating by one level, citing rising debt and a steady deterioration in standards of governance. The downgrade triggered a sell-off in U.S. stock markets.

From the Sensex pack, Titan fell the most by 2.56% after the company reported a 4.3% drop in consolidated net profit at ₹756 crore for the June quarter.

Bajaj Finserv, ICICI Bank, HDFC Bank, Reliance Industries, Nestle, UltraTech Cement, Bajaj Finance, Maruti, Tata Consultancy Services, IndusInd Bank and State Bank of India were the major laggards.

Infosys emerged as the biggest gainer rising by 0.63%. JSW Steel, NTPC and Power Grid were also among the gainers. In total, 23 Sensex stock dropped while seven advanced.

The pharma sector managed to weather the storm thanks to its strong earnings outcome, while mid and small-cap stocks outperformed the benchmark index, Mr. Nair said.

"The domestic services PMI has surpassed market expectations, reaching a 13-year high due to a rise in new orders, particularly in international sales," he added.

In the broader market, the BSE smallcap gauge climbed 0.23% and midcap index gained 0.14%.

Among indices, realty fell by 1.85%, metal declined by 1.15%, bankex (1.06%), financial services (0.94%), oil & gas (0.92%) and consumer durables (0.84%).

Healthcare, utilities and power were the gainers.

"The recent drift in the global indices is putting pressure now and we expect the negative tone to continue," Ajit Mishra, SVP - Technical Research, Religare Broking Ltd said.

In the broader market, Sanghi Industries jumped 5 per cent after Ambuja Cements announced the acquisition of a majority stake in the cement manufacturer at an enterprise value of ₹5,000 crore.

Ambuja Cement shares closed higher by 2.87%.

In Asian markets, Seoul, Tokyo and Hong Kong ended in the negative territory while Shanghai settled in the green. European markets were trading in the red.

Foreign institutional investors (FIIs) offloaded equities worth ₹1,877.84 crore on Wednesday, according to exchange data.

Global oil benchmark Brent crude dipped 0.46% to $82.82 a barrel.

Meanwhile, India's services sector growth touched a 13-year high in July as a substantial improvement in demand conditions and pick-up in international sales induced the strongest increase in new business and output, a monthly survey said on Thursday.

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