Sensex down over 1,000 points at closing, Nifty around 16,200 amid weak global cues

Bears kept a grip on the market with benchmark indices closing in deep red on Friday amid weak global cues. After opening on a weak note, Sensex and Nifty extended losses, tracking losses in heavyweights such as HDFC and Reliance.

The BSE Sensex closed at 54,303.44, down 1016.84 points or 1.84 per cent. It recorded an intraday high of 54,780.78 and a low of  54,205.99. The Nifty 50 closed at 16,201.80, down 276.30 points or 1.68 per cent. It recorded an intraday high of 16,324.70 and a low of 16,172.60

Over 2,000 stocks decline

The market breadth turned in favour of the decliners with 2,010 stocks declining on the BSE against 1,298 that advanced while 121 remained unchanged. Furthermore, 12 stocks hit the upper circuit as compared to the two stocks that were locked in the lower circuit. Besides, 64 stocks touched 52-week high and 62 touched 52-week low.

Grasim, Apollo Hospitals, Asian Paints, Divi’s Lab and Dr Reddy’s were the top gainers on the Nifty 50, while Bajaj Finance, Kotak Bank, HDFC, Hindalco and Reliance were the top losers. 

According to Mitul Shah, Head Of Research at Reliance Securities, “Indian equities closed lower following weak global cues as market sentiments took a hit due to the European Central Bank’s rate hike plans for July and upcoming U.S inflation data. Globally, Russia-Ukraine crisis and resumption of lockdowns in parts of Shanghai, China, to curb the spread of coronavirus, continue to affect markets.”

“Investors are still attempting to gauge the market’s trajectory as global markets have also remained volatile due to Fed’s upcoming policy decisions and the Russia-Ukraine crisis which is affecting supply chain and logistics. RBI is looking at another phase of coordinated action between fiscal and monetary authorities. After RBI’s 50 bps hike, US Fed also expecting rate hike in next week,” shah added.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, “Indian equity markets ended the week on a negative note. Major key indices and sectoral indices declined during the week. Amid persistent inflation, central banks continued with monetary policy tightening.”

After RBI hiked repo rate by 50 bps to 4.9 per cent, European Central Banks decided to end net asset purchases under its asset purchase programme and also signaled towards rate increase in its July monetary policy meeting.

European Central Bank on Thursday decided to end net asset purchases under its asset purchase programme. It also decided to increase interest rate next month for the first time in 11 years.

Also, rising crude oil prices and US 10-year treasury yields have added to the negative market sentiment. A weakening rupee has also added to investor concerns. The Indian rupee touched a record low of 77.87 against the US dollar on Friday. 

In a positive move, Fitch Ratings on Friday revised the outlook on India’s sovereign rating to to stable from negative while affirming the BBB- rating.

According to Ajit Mishra, VP-Research, Religare Broking Ltd, “Markets will continue to take cues from the global markets in absence of any major domestic event. First, participants will react to the US inflation data and upcoming macroeconomic data (IIP, CPI & WPI) will also be in focus. While the index is gradually inching lower, a mixed trend on the sectoral front is offering opportunities on both sides. So traders should align their positions accordingly.”

“FII’s continued with their selling of Indian equities. Monsoon progress needs to be watched out for as a good monsoon will calm concerns about further food inflation. However, inflation, commodity price movement and central bank measures are critical factors for market performance over the near to medium-term,” said Chouhan.

Sectoral indices

On the sectoral front, all indices closed in the red. Nifty IT, Nifty Financial Services and Nifty Oil & Gas each closed over 2 per cent lower. Nifty Bank and Nifty Private Bank were each down nearly 2 per cent. Nifty Metal and Nifty Realty closed over 1 per cent lower each.

Broader market

Broader market, too, witnessed selling pressure with broader indices closing in the red.

Nifty Midcap 50 was down 0.71 per cent, while Nifty Smallcap 50 was down 1.34 per cent. The S&P BSE Midcap was down 0.64 per cent, while the S&P BSE SMallcap was down 0.70 per cent. 

The volatility index rose 2.27 per cent to 19.58.

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