Stock losses spiral on fiscal fears, Korean muscle-flexing
Stock benchmarks today came under
panic attack and closed the day with losses of over 1 per cent
due to fears of fiscal maths going haywire because of an
imminent government spending push to revive the economy.
The risk-off mode was on full display in light of a fresh
war of words that broke out between the US and North Korea.
US President Donald Trump is "mentally deranged" and will
"pay dearly" for his threat to destroy North Korea, the
communist country said today as its foreign minister hinted
that the regime may explode a hydrogen bomb over the Pacific
From the very start which saw a lower opening, the 30-
share index kept rolling down before settling lower by 447.60
points, or 1.38 per cent -- its biggest single-day fall since
November 15 last year -- at 31,922.44. The loss was the
largest in nearly 10 months.
This is also the weakest closing since September 11 when
the index had come in at 31,882.16. It had lost 53.72 points
in the previous three days.
The broader Nifty cracked below the psychologically
important 10,000-mark to hit a low of 9,952.80 before ending
at 9,964.40, down 157.50 points -- or 1.56 per cent -- the
single-biggest loss since November 15, 2016. This was the
lowest closing since September 8.
On a weekly basis, the BSE recorded a hefty fall of
350.17 points, or 1.08 per cent, the biggest since August 11.
The NSE, too, ended lower by 121 points, or 1.19 per cent for
"With global equity markets in risk-off mode over Korean
tensions, the ongoing weakness has gained more momentum.
Approaching F&O expiry has added to liquidation pressure. With
FIIs continuing to be net sellers, investors are fretting on
the impact on fiscal deficit targets if the government were to
go overdrive with economic revival plans," said Anand James,
Chief Market Strategist, Geojit Financial Services Ltd.
The rupee was in a sticky spot in the beginning, which
dropped to a near six-month low against the dollar during the
day, on liquidity concerns after the US Fed said it will roll
back its massive stimulus and speculation of a widening fiscal
deficit. But later, the domestic currency managed to recover.
Finance Minister Arun Jaitley yesterday had promised
"appropriate actions" at the "right time" to revive the
slowdown-hit economy as growth slipped to a three-year low of
5.7 per cent in the June quarter.
Sentiment was in tatters after heavy losses in Asia, set
off by China sovereign rating downgrade on fears over its
ballooning debt and a lower opening in Europe.
Shares have lost their momentum after hitting record
highs recently as valuations turned expensive, with most
sectoral indices ending in the red.
Tata Steel was the top Sensex loser, skidding 4.70 per
cent to close at Rs 654.55, followed by L&T, which fell 3.49
per cent. Others that weighed included Reliance Industries,
ICICI Bank, Hero MotoCorp, SBI and Adani Ports.
There was no let-up in foreign selling as FPIs sold
shares worth Rs 1,204.95 crore while domestic institutional
investors (DIIs) bought equities worth a net Rs 1,416.55 crore
yesterday, as per provisional data.
BSE realty melted the most by 4.29 per cent. Metal,
capital goods and power too added to the weakness.
Selling pressure rubbed off on broader markets, which
dragged down small-cap and mid-cap indices by 2.93 per cent
and 2.71 per cent, respectively.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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