Despite a measured opening, the stock markets took a turn for a worse in the last hour of trade on Monday, responding to negative starts across European markets and a sell-off in global equities. A depreciating rupee (at 67.94 to the dollar) and a subdued outlook for global crude oil prices added to pressures among traders.
Markets opened flat in the morning, with no cues forthcoming from Asia. (Most Asian markets were shut on Monday for the Lunar New Year holiday.) Benchmark indices lost 1.36 per cent in Monday’s last 90 minutes of trade. The Sensex closed at 24,287.42, down 329 points, while the Nifty ended the day at 7,387, down nearly 102 points. Markets turned highly volatile just before close with volatility index India Vix reading 20.2575, up 11.83 per cent.
The defensives were on sale, with Nifty IT down 2.01 per cent, while the Nifty Pharma lost 1.32 per cent. Indices for commodities, FMCG and energy all lost a percentage point as well. The Bank Nifty lost 0.76 per cent to close at 15,046.80.
Foreign investors sold net equity of ₹84.56 crore, while domestic institutions took the opportunity to buy, gathering up net equity of ₹279.49 crore. Anand James, Co Head, Technical Research Desk, Geojit BNP Paribas Financial Services, said in a note: “With the Chinese markets closed due to lunar year holidays, the Indian markets opened on a tentative footing taking cues from Friday’s negative cues in US markets…However prices collapsed, towards the close, as investors chose to book profits ahead of GDP data scheduled for later in the day. Meanwhile, FII’s exit from Indian equities showed no sign of abating.”