Snapping its four-session rising streak, benchmark Sensex tumbled about 180 points on Wednesday as investors took money off the table following forecast of below-normal monsoon this year.
Benchmark indices, which got off to a positive start, dived in late afternoon trade after private weather forecaster Skymet predicted below-normal monsoon for 2019, stoking fears of a slowdown in growth.
All BSE sectoral indices finished with losses, led by oil and gas, telecom, capital goods and industrials.
After swinging nearly 450 points, the 30-share BSE Sensex settled 179.53 points, or 0.46% lower at 38,877.12. The gauge had closed above the 39,000-mark for the first time ever Tuesday.
The broader NSE Nifty too pared early gains and ended 69.25 points, or 0.59%, down at 11,643.95.
The Skymet forecast “comes just a day before RBI is expected to cut rates by 25 bps and adopt a pro-growth stance. However, expectation of poor rainfall and already slow economic growth alongside subdued inflation may pressurise RBI to go for a higher rate cut, thus surprising the street positively,” said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
The RBI’s Monetary Policy Committee (MPC) will unveil the first policy statement for 2019-20 on Thursday.
“Market slid after touching a new high as initial forecast of below normal monsoon by Skymet and rise in oil prices impacted the sentiment. Investors are likely to be more vigilant going forward due to general election and have a bottom-up approach considering the performance of fourth quarter results.
“Global market stayed positive due to signs of pick up in Chinese economy and prospects of US-China trade deal,” said Vinod Nair, Head of Research, Geojit Financial Services.
SBI was the biggest loser in the Sensex pack, shedding 2.40%, followed by Yes Bank, Bharti Airtel, L&T, Sun Pharma, M&M, ICICI Bank, ONGC, RIL, Asian Paints, Vedanta and HUL, which lost up to 2.37 per cent.
On the other hand, Maruti, HCL Tech, HDFC, Tata Steel, PowerGrid, Hero MotoCorp and TCS ended with gains of up to 2.78 per cent.
Broader indices too ended in the red, with the BSE Midcap and Smallcap slipping up to 0.87%.
Meanwhile, foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in ₹543.36 crore on Tuesday, while domestic institutional investors (DIIs) sold equities to the tune of ₹437.70 crore, provisional data available with stock exchanges showed.
Global markets rallied to six-month highs amid optimism surrounding the US-China trade talks.
In Asia, Hong Kong’s Hang Seng jumped 1.22%, Korea’s Kospi rose 1.20%, Japan’s Nikkei ended 0.97% higher and Shanghai Composite Index gained 1.24%.
In Europe, Frankfurt’s DAX was up 1.33%, Paris CAC 40 rose 0.74%, while London’s FTSE slipped 0.04% in early deals.
The benchmark Brent crude futures rose 0.53% to $69.74 per barrel on supply concerns.
Meanwhile, the rupee appreciated 30 paise to 68.44 against the US dollar intra-day.
