Sensex tanks 453 points on fiscal deficit woes, F&O expiry

BL Internet Desk Chennai | Updated on January 09, 2018 Published on November 30, 2017


Traders remain wary ahead of GDP data

A combination of negative events such as widening of fiscal deficit, strong US GDP growth, rupee depreciation and jump in crude oil prices along with expiry of futures and options contracts led benchmark indices to crack on Thursday. Nervousness towards second quarter GDP data, outcome of the OPEC meeting and weak Asian markets also weighed on sentiments.

The Sensex tumbled over 453 points -- its biggest single session fall in one year -- to close at 33,149.35 on widespread selling triggered by widening fiscal deficit concerns.

India's fiscal deficit rose to 96.1 per cent of the full-year target by the end of October. It was marginally lower at 79.3 per cent of the Budget Estimate a year ago.

Investors also remained subdued ahead of September quarter GDP data to be released later today.

Squaring-up of positions by participants following end of November series contracts in the derivatives segment and a weak trend in other Asian markets also weighed on the sentiment.

The Sensex, after a gap down opening at 33,542.50, continued its slide to touch a low of 33,108.72. It finally settled 453.41 points or 1.35 per cent lower at 33,149.35. This was its biggest single session fall since November 15 last year, when it had lost 514.19 points.

The broader NSE Nifty, after cracking below the key 10,300-mark, touched a low of 10,211.25, before finally ending 134.75 points, or 1.30 per cent, down at 10,226.55. This was its biggest single day fall since September 27 this year, when it had lost 135.75 points.

Barring realty and consumer durables, all other BSE sectoral indices ended in the negative zone. Among them, banking index fell 1.88 per cent, followed by metal 1.1 per cent, PSU 1.09 per cent and auto 0.98 per cent. On the other hand, realty index was up 1.09 per cent and consumer durables 0.06 per cent.

Major Sensex losers were Kotak Bank (-2.63%), State Bank of India (-2.54%), Reliance (-2.42%), Axis Bank (-2.39%) and Tata Motors (-2.32%), while the only two gainers were Dr Reddy's (+0.45%) and Bharti Airtel (+0.23%).

PSU banks seem to be under pressure as the likelihood of interest rates falling further from current levels has been postponed, Jasani said.

All sectoral indices barring Realty ended in the red, falling 0.7-2.3 per cent led by public sector banks. However, fall in the broader markets was less than in the equity benchmarks. Nifty Midcap lost 0.7 per cent, while Nifty Smallcap ended almost flat. Even the market breadth was not very bad as 1,027 shares declined, while 690 ended higher on the NSE.

Markets could reverse on Friday due to encouraging GDP growth of 6.3 per cent for the September quarter, compared to 5.7 per cent in the June quarter, which came after market hours. “The numbers clearly indicate that the economy is slowly coming out of the impact of demonetisation and GST. With the lower base of third and fourth quarters and with ongoing recovery, we believe that second half GDP numbers are likely to be far better than first half and we believe that FY18 GDP growth is likely to be around 7 per cent,” said Vaibhav Agrawal, Head of Research at Angel Broking.

GDP data, F&O expiry

Domestically, investors were wary ahead of the GDP data, with analysts expecting growth to have picked up as businesses started to overcome teething troubles after the launch of a national sales tax and the ban on high-value banknotes last year.

Some volatility was also anticipated ahead of the expiry of monthly derivative contracts at the end of the session.

“Markets are at quite a high level in terms of valuations; so some amount of correction is normal to expect,” said Deepak Jasani, head of retail research at HDFC Securities

FII selling

As per provisional data, foreign portfolio investors (FPIs) sold shares worth Rs 859.27 crore yesterday. Domestic institutional investors (DIIs) bought equities worth Rs 771.07 crore.

Asian shares fell on Thursday, weighed down by a plunge in high-flying technology shares, a move that some see as a healthy correction after a strong rally but others believe may herald the peak of a “super cycle” that has been boosting the sector.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.5 per cent, with technology bellwether Samsung Electronics falling 2.9 per cent to two-month lows. Japan’s Nikkei dipped 0.1 per cent, led by a 2.0 per cent fall in electronic machinery makers.

In the US, the Nasdaq Composite dropped 1.27 per cent as investors shifted to financials and other sectors even as the S&P 500 was almost flat and the Dow Jones Industrial Average gained 0.44 per cent.

(With inputs from Agencies)

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Published on November 30, 2017
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