Weak global cues pulled down the Indian benchmark indices on Friday, with the abrupt closure of six debt schemes by Franklin Templeton Mutual Fund also affecting investor sentiment. The 30-share Sensex lost 535.86 points, or 1.68%, to close at 31,327.22. The broader Nifty ended the day at 9,154.40, down 159.50 points, or 1.71%.
Elsewhere in Asia, the benchmarks of Hong Kong, Japan, South Korea, Taiwan, Indonesia, China and Singapore, all ended in the red.
Back in India, the market breadth was extremely weak, as more than 1,600 stocks ended in the red as against less than 750 gainers.
In the Sensex pack, financials lost the maximum ground with stocks like Bajaj Finance, IndusInd Bank, Axis Bank, ICICI Bank, HDFC and State Bank of India among the top losers.
Investor sentiment took a hit after Franklin Templeton Mutual Fund announced late on Thursday that it had decided to wind up six debt schemes that have combined assets worth nearly ₹26,000 crore due to illiquid low-rated securities.
“The decision by Franklin Templeton to voluntarily wind up six of their debt funds has shaken up the debt mutual fund industry,” said Deepak Jasani, Head- Research, HDFC Securities.
“One hopes that this is a one-off case and we will not see more such cases even though the economy is yet to come out of this difficult phase,” Mr. Jasani added.
Meanwhile, institutional investors were net sellers, with both foreign and domestic institutional investors ending Friday as net sellers at ₹207 crore and ₹994 crore, respectively.
