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An evening walk down Dalal Street | Global weakness, depreciating rupee weigh on Sensex, Nifty; PSU banks metals crack

October 11
18:06 2018

A sell-off in global markets had its impact on the local market, as the Sensex closed over 700 points lower, while the Nifty ended just around 10,250-mark.

Sell-off in global markets along with a weak rupee back home weighed big on local indices, with the Sensex shedding over 750 points. The Nifty ended below 10,250-mark.

Investor wealth to the tune of Rs 2.52 lakh crore was wiped off as a result of Thursday’s trade.

Global markets were lower as there were concerns over rising interest rates in the US. US President Donald Trump also said that the recent weakness was in fact a long awaited correction.

The session saw a gap-down opening as the Sensex plunged over 1,000 points, while the Nifty fell below 10,200-mark in the first few minutes of trade. The SGX Nifty had been trading 200 points lower before equity markets opened in India.

However, the market staged a recovery from the day’s low points as energy names attempted to support the market. The likes of Indian Oil, BPCL and HPCL, among others rallied as crude prices took a hit.

Among sector, banking, particularly PSU banks saw maximum pain, along with metals, automobiles, pharmaceuticals, and IT names. A recovery in rupee from record lows failed to make any impact.

At the close of market hours, the Sensex closed down 759.74 points or 2.19% at 34001.15, while the Nifty ended lower by 225.40 points or 2.15% at 10234.70. The market breadth is negative as 824 shares advanced, against a decline of 1,736 shares, while 866 shares were unchanged.

Yes Bank, ONGC, HPCL and IOC were the top gainers, while State Bank of India, Tata Steel, Indiabulls Housing Finance and Bajaj Finserv lost the most.

“Market sell-off has now become international, with last-man-standing index Dow Jones has also started its correction. The sell-off has turned out to be broad based across the industries and categories. However, investors can keep the shopping-list ready as high quality companies with strong fundamentals tend to bottom-out ahead of Nifty. The top priority for investors should be preservation of capital and confidence,” Jagannadham Thunuguntla,  Senior Vice-president and Head of Research (Wealth), Centrum Broking Limited said in a statement.

Stocks in News

Banks were one of the major losers in trade as weakness in the sector became investors’ preferred choice to sell. Nifty PSU bank index was down over 5 percent, while the Bank Nifty fell over 2 percent.

Shares of oil marketing companies rose in trade as investors cheered fall in crude oil prices. IOC, BPCL and HPCL were all higher by 5-15 percent after crude prices took a hit. The commodity fell as a spillover effect of a plunge in global equity markets.

Aviation stocks such as Jet Airways, SpiceJet and Jet Airway rose 1-3 percent as traders bet on cut in aviation turbine fuel as well as lower crude oil prices.

Bandhan Bank’s shares closed 8 percent lower even as the bank reported a net profit growth of 47 percent at Rs 488 crore. Brokerage houses have expressed some concerns on its exposure to IL&FS.

Zee Entertainment gained on the back of good numbers for the September quarter. The firm reported a net profit of Rs 387 crore on the back of good revenues from advertisements and subscriptions. The stock closed 1 percent higher.

Shares of Dilip Buildcon fell 5 percent even as the company bagged a project in Odisha.

Uttam Galva ended 3 percent lower after its Q2 net loss widened to Rs 580 crore.

Shares of Tata Consultancy Services (TCS) shed 3 percent ahead of results announcement for the September quarter.

Global Markets

Markets in Europe were lower on the back of a weak handover from Wall Street as there are fears over rising interest rates in the US and an expected slowdown in global growth. Stoxx 600 was down by 1.8 percent during mid-morning deals.

Meanwhile, Asian markets fell sharply, taking cues from other global peers. The Hang Seng index was down by 3.88 percent in afternoon trade.

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