Market slides for 7th day, liquidity issues rear their head

Fortunes soured for stocks for the

seventh day in a row as the Sensex today plunged a sharp 440

points to close at an over three-month low, triggered by a

weakening rupee on concerns that foreign capital will move out

sooner than later after Fed Chair Janet Yellen's comments.

Yellen, in a speech, said the US Federal Reserve should

stick to gradual rate hikes despite the uncertainty about the

inflation trajectory.

This was enough for foreign investors to hit the exit

button, looking for instruments that yield better returns. The

rupee took a hammering, sinking to over a six-month low of

65.75 against the dollar during the day.

The lingering Korean stand-off dealt a further blow after

US President Donald Trump dialled up his threats saying

America is "totally prepared" for a "military option" on North

Korea, warning that would be "devastating".

Updates of military action on the eastern border hastened

the market's fall, which has been on a slippery slope ahead of

the derivatives expiry tomorrow.

Clearly, it was downhill drive for the BSE benchmark

right in the beginning, which settled lower by 439.95 points,

or 1.39 per cent, at 31,159.81.

This is the weakest closing since June 30 when the gauge

had settled at 30,921.61. It had lost 824 points in the

previous six sessions.

Mood was downcast at the 50-share NSE Nifty too, which

after regaining the key 9,900-mark at one stage closed down

135.75 points, or 1.38 per cent, at 9,735.75 -- a level last

seen on August 11 when it closed at 9,710.80.

"Market extended losses while the rupee sank to a 6-month

low on continued outflow of foreign funds. Additionally,

slowdown in GST tax collection dented sentiment and investors

expected that the GST-led disruption is likely to extend and

will hurt earnings for the next few quarters," said Vinod

Nair, Head of Research, Geojit Financial Services Ltd.

Investors' wealth as measured by market capitalisation of

BSE listed companies took a big knock of Rs 1,79,524 crore,

which read Rs 1,30,55,056 crore.

From the Sensex bloc, Adani Ports barrelled down 4.85

per cent, followed by SBI 2.89 per cent. The overall losses

swelled because of weakness in heavyweight RIL, Dr Reddy's,

Sun Pharma and ICICI Bank.

TCS emerged as the big gainer, up 0.62 per cent, while

Coal India rose too.

Mid-cap and small-cap stocks moved in sync with the

benchmarks and dropped by up to 2.10 per cent.

Stocks of Divi's Lab crashed 11.60 per cent to Rs 850.15

after the company said it has received six new observations

from the US Food and Drug Administration (USFDA) after

inspection of its Visakhapatnam unit.

Selling was maximum in the BSE realty index, down 2.66

per cent. Healthcare, capital goods and power stocks also kept

low.

As has been the case so far, foreign portfolio investors

(FPIs) stayed reluctant towards Indian shares, who net sold

shares worth Rs 1,915.54 crore. Domestic institutional

investors (DIIs) remained true to their form, picking up

shares worth a net Rs 1,537.10 crore yesterday, according to

provisional data.

Overseas, most Asian indices ended mixed. Participants

waited for key events, including the unveiling of Trump's tax

reforms and the release of Japanese economic data later in the

week. European shares moved higher.

 

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)