Sensex sinks 440 pts to end at 3-month low; Nifty sub-9800 ahead of FO expiry
The market fell sharply by 1.4 percent on Wednesday, after Federal Reserve Chair Janet Yellen hinted at an interest rate hike by December this year. The steep fall in rupee and Indian Army’s retaliatory fire on insurgents at Myanmar border also caused selling pressure. The NSE Nifty closed below psychological 9,800 level ahead of expiry of September derivative contracts on Thursday.
The fall was driven by selling pressure across sectors. Nifty Pharma and PSU Bank indices fell the most among sectoral indices, down 3 percent each followed by auto, FMCG and infra.
Equity benchmarks slipped for seventh consecutive session today. The 30-share BSE Sensex closed down 439.95 points or 1.39 percent at 31,159.81, the lowest level since June 30.
The 50-share NSE Nifty ended below its 100-DMA (daily moving average), falling 135.75 points or 1.38 percent to 9,735.75.
Experts feel the market sentiments are expected to be week for few more sessions, citing economic & earnings growth concerns, likely fiscal deficit woes, geopolitical tensions etc. The recovery is likely only in October, especially after the start of September quarter earnings season, they said.
They advised traders to remain cautious and avoid creating fresh long positions as technical indicators point towards 9,685 in the near term.
The correction was more in broader markets as the Nifty Midcap and Smallcap 100 indices tumbled 2.3 percent each. About six shares declined for every share rising on the NSE.
Meanwhile, the rupee hit fresh six-month low of 65.75 against the United States Dollar intraday today, falling 26 paise to end at 65.72 due to fall in equities and FIIs selling.
The Nifty Bank closed down 1.6 percent at 23,812.95, the lowest level in last 10 weeks. ICICI Bank, Yes Bank and SBI were down 2-3 percent while HDFC Bank declined 0.88 percent.
Sun Pharma was down 2.5 percent after the founder Dilip Shanghvi retained tepid outlook for FY18. He expects single digit decline in current year revenue due to continued US pricing pressure. Divis Labs share price plunged 11.6 percent following six observations from the USFDA for its Vizag unit 2.
Technology stocks TCS (up 0.8 percent) and Tech Mahindra (up 0.6 percent) on sharp rupee depreciation.
Among other largecaps, Reliance Industries, Adani Ports, ITC, L&T, Vedanta, Maruti and Dr Reddy’s Labs were down 1.5-4.6 percent.
In broader space, Bajaj Finserv, Reliance Capital, Edelweiss Financial, DHFL, L&T Finance, REC, PFC, PTC India Financial, PNB Housing Finance, Tata Global Beverage, Avenue Supermarts, Cyient, JSW Energy and Eros International were down 3-10 percent.
After subdued listing, ICICI Lombard General Insurance rebounded to end with 3.11 percent gains at Rs 681.55 against issue price of Rs 661 per share.
Shriram Transport gained nearly 4 percent after a media report indicated the Shriram Group and IDFC have abandoned merger plan worked out in July 2017.
Den Networks ended with 4 percent rally after a media report indicated that Mukesh Ambani-owned Reliance Industries is in talks to acquire the company.
On the global front, European markets were mildly higher on growing expectations of another rate hike in the United States before year-end. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.2-0.5 percent at the time of writing this article. Asian markets ended mixed.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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