Sensex logs 2nd biggest fall of 2019, Nifty at 11,419
Disappointing earnings and reports of slowing economic growth dented market sentiments.
Analysts said that disappointing earnings and reports of slowing economic growth dented market sentiments and they also felt that absence of any fresh positive triggers has been the reason that the markets haven't been able to shake off the negativity after the budget proposals.
Asian Development Bank lowered India's GDP growth forecast to 7 per cent for the current year on the back of fiscal shortfall concerns. Meanwhile, the Finance minister on Thursday stuck to her Budget proposal and declined to remove the applicability of the new surcharge on the super rich on foreign portfolio investors (FPIs) which further hurt the sentiments. She said they should adopt a corporate structure to avoid the levy.
Also, slow progress of moonsoon weighed on investors' risk appetite as IMD had said that India’s monsoon rains were 20 per cent below average in the week ending on Wednesday, as rainfall was scanty over the central, western and southern parts of the country raising concerns over the output of summersown crops.
Meanwhile, shares of Reliance Industries were in focus today as the company is scheduled to announce its June quarter earnings later today. The shares of RIL closed 1 per cent lower at Rs 1249 on BSE. Analysts expect that the oil-to-telecom conglomerate may deliver muted profit growth due to challenges in the refining and petchem segment. However, telecom arm Jio and retail business may drive performance, analysts said.
On the global front, Asian shares closed higher while European shares also jumped after a speech by a top Federal Reserve official further cementing expectations for a US interest rate cut at the end of July, fuelling appetite for risky assets and capping the dollar. But in an unusual move, a New York Fed representative later clarified that the speech was academic in nature, based on 20 years of research, and “not about potential policy actions” at the Fed’s rate-setting meeting on July 30-31.
BSE Sensex closed 560.45 points, or 1.44 per cent, lower at 38,337.01. While NSE Nifty ended at 11,419.25, down 177.65 points or 1.53 per cent.
Market at a glance
In the 30-pack Sensex, 4 stocks ended in the green and 26 in the red with M&M as the worst performer and NTPC the best. Bajaj Finance, IndusInd Bank, YES Bank and Hero MotoCorp too joined M&M on the losers list, slipping up to 5 per cent.
TCS, Power Grid and ONGC were among other Sensex stocks that advanced.
The BSE Midcap index declined 1.99 per cent and the BSE Smallcap index ended 1.83 per cent lower, underperforming benchmark Sensex.
BSE Auto index recorded losses of 3.24 per cent followed by Finance, Consumer Discretionary and Bankex index.
In terms of index contribution, TCS, NTPC and Power Grid were the top support while HDFC twins, ICICI Bank and ITC were the top drag on Sensex.
Market slid as there was sharp sell-off by foreign funds due to the government’s reluctance to tweak FPIs income tax surcharge, and the deficiency in monsoon rain, which impacted risk sentiment. Additionally, downward revision in India’s growth to 7% by ADB and lackluster earnings from domestic corporates added anxiety over premium valuation. Key heavy weights are likely to announce results next week
-Vinod Nair, Head of Research, Geojit Financial Services