Mumbai: Stocks spiralled lower for the second straight session Thursday after the US Fed hiked interest rates and struck a hawkish stance amid rising crude oil prices.
The BSE Sensex tumbled 218.10 points to 36,324.17, while the NSE Nifty dropped 76.25 points to finish below the 11,000-mark. Moreover, September futures and options (F&O) expiry added to market volatility as investors offloaded their long bets instead of carrying them forward to the next series for October, brokers said.
Participants remained cautious after the government increased import duties on select goods to stem the rupee’s fall and the RBI announced measures to ease liquidity concerns.
Global markets reeled after the US Fed raised interest rates for the third time this year Wednesday and said it foresees another rate hike in December, three more next year, and one in 2020.
The BSE benchmark Sensex, after opening positive, advanced to a high of 36,711.62 on covering-up of short positions in select stocks.
However, it slipped to a low of 36,238.23 in late-afternoon trade, before finally finishing at 36,324.17, down 218.10 points, or 0.60 per cent. The NSE Nifty declined 76.25 points, or 0.69 per cent, to end at 10,977.55.
Intra-day, the 50-share index shuttled between 11,089.45 and 10,953.35. Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 809.95 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 1,555.44 crore Wednesday, as per provisional data.
“The Fed’s 25 bps rate hike was in line with expectation whereas outflow of foreign funds and higher oil price weigh on sentiment. “Raising of import duty for essential goods, liquidity constrains with NBFC and F&O expiry added volatility in the market. This pressure is likely to continue till the financial market stabilizes and confidence reverts with accommodative valuation,” said Vinod Nair, Head of Research, Geojit Financial Services.
Yes Bank emerged as the worst performer in the Sensex pack, plunging 9.14 per cent. Other laggards included Maruti Suzuki 3.68 per cent, Tata Motors 3.32 per cent, Axis Bank 2.79 per cent, ONGC 2.49 per cent, Kotak Bank 2.16 per cent, HDFC Ltd 2.07 per cent, ICICI Bank 1.87 per cent, L&T 1.80 per cent, M&M 1.66 per cent, Sun Pharma 1.59 per cent, Bharti Airtel 1.33 per cent, IndusInd Bank 1.24 per cent, Adani Ports 1.08 per cent, Vedanta 0.48 per cent, Hero Motocorp 0.42 per cent and NTPC 0.39 per cent. TCS topped the gainers list by rising 2.16 per cent, followed by Coal India 1.39 per cent, Asian Paints 0.97 per cent, PowerGrid 0.93 per cent and Infosys 0.88 per cent, among others.
Selloff in the NBFC space continued, with PNB Housing Finance slumping 7.29 per cent, Indiabulls Housing Finance 6.05 per cent and Dewan Housing Finance 4.87 per cent.
In the aviation segment, SpiceJet, InterGlobe Aviation and Jet Airways fell by up to 4.82 per cent due to a hike in aviation turbine fuel import tariff. Sector-wise, the BSE realty index suffered the most by falling 2.79 per cent, followed by capital goods 1.99 per cent, finance 1.95 per cent, auto 1.86 per cent, infrastructure 1.67 per cent, healthcare 1.66 per cent, bankex 1.55 per cent, consumer durables 1.43 per cent, telecom 0.98 per cent, oil & gas 0.61 per cent, PSU 0.60 per cent, metal 0.58 per cent, power 0.55 per cent and FMCG 0.19 per cent. IT index moved up 0.77 per cent and teck 0.65 per cent.
The broader markets too fell in sync with the benchmarks. The BSE mid-cap index dropped 2.19 per cent and the small-cap gauge shed 1.97 per cent.
In Asian trade, stocks gave up earlier gains as investors considered the prospects of more US interest rate hikes amid US President Donald Trump’s latest broadside in his trade war with China.
Shanghai Composite Index fell 0.54 per cent and Hong Kong’s Hang Seng shed 0.36 per cent, while Japan’s Nikkei ended 0.99 per cent lower. In Europe, Frankfurt’s DAX fell 0.52 per cent and Paris CAC declined 0.34 per cent. London’s FTSE was quoting 0.01 per cent higher. (PTI)
