Sensex drops 296 points as bear hug grips D-Street

Sensex drops 296 points as bear hug grips D-Street

Succumbing to losses for the fifth consecutive session on Monday, markets witnessed across-the-board selling with key indices logging huge losses.

Weak currency and dismal earnings revival amid global cues roiled the sentiment. Foreign capital exit ahead of derivatives expiry on Thursday also hit sentiment on the domestic front.

The 30-share BSE Sensex plunged 295.81 points, or 0.93%, to close at 31626.63, while the broader. The index witnessed a loss of 265.60 points, or 0.83%, this month.

On the other hand, Nifty tanked 91.80 points, or 0.92%, ending at 9872.60. It has plummeted 501.32 points in the previous four sessions. The broader index fell 101.80 points, or 1.02% in September.

The closing is lowest for both the key indices since August 29. Adani Ports fell 3.29%, Tata Steel moved down 3.07%, L&T lost 2.95% and Lupin declined 2.50%.

ITC, Mahindra and Mahindra, Bharti Airtel, HDFC, Dr Reddy’s, Asian Paints, Maruti, Sun Pharma and HDFC Bank, were among other laggards on the Sensex.

Deepak Jasani, head-retail research, HDFC Securities, told DNA Money,”Strengthening of dollar and a weakening rupee, earnings that are taking time to revive and FII outflows, have led to the fall in markets. The next two weeks may witness Nifty retreating to 9650.”

While some intermittent bounces are expected, these may not last and market may again decline after that, Jasani added.

Germany remained in a state of flux given that the German chancellor Angela Merkel won a fourth term with uneasy coalition to form the next government. Merkel’s party looked set to remain the largest entity in the next German parliament.

Weak opening in Europe served to further restrict market gains and kept them languishing in negative territory. Stocks in Europe and Asia dropped as investors digested election results in Germany and New Zealand.

Geopolitical tensions on North Korea and continuous foreign insititional investors (FIIs) outflows led to nervous moments.

The realty index contributed most to the decline plummeting 3.46%. Additionally, healthcare, capital goods, metal were the other losers in the sectoral space. The BSE small-cap index fell 2.02% while the mid-cap index plunged 1.14%.

Foreign portfolio investors sold shares worth Rs 1,241.73 crore last Friday, according to data. Domestic institutional investors bought shares worth a net Rs 521.17 crore.

Overseas, Asian markets ended grim as stocks dropped since investors digested the political developments in Germany and New Zealand which happened over the weekend.

Hong Kong’s Hang Seng ended down 1.26%, while China’s Shanghai Composite Index fell 0.33%. The currency market lost steam with the rupee falling 32 paise at 65.12 against the US dollar during the day.

Soaring oil prices, which traded at seven-month high of $56.86 a barrel overseas, further intensified the jittery environment.

Sanjiv Bhasin, executive vice president, IIFL, said, “With bond yields rising, rupee losing steam, corporate earnings not catching up and continuous foreign capital outlflows, markets have fallen. The decline is likely to continue with Nifty moving back to 9400 in October.”