Mumbai: Prospects of political instability led to broad-based selling in the Indian equity markets on Friday, even as weak global cues continued to mar investors’ sentiments.
According to market observers, the ongoing IPO (initial public offering) season, along with the nearing of financial year-end and outflow of foreign funds, were among other factors that contributed to the downfall of the equity indices.
On the National Stock Exchange (NSE), the wider Nifty50 declined by 165 points or 1.59 per cent to close at 10,195.15 points.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE closed at 33,176 points — down 509.54 points or 1.51 per cent from the previous session’s close — scaling a low of 33,119.92 points during the intra-day trade.
The BSE market breadth was bearish with 1,835 declines and 859 advances.
In terms of the broader markets, the S&P BSE mid-cap index edged lower by 1.07 per cent and the small-cap index by one per cent.
“Stocks suffered steep losses on the last trading day of the week in a broad-based sell-off. Trading sentiment took a hit after Telugu Desam Party (TDP) reportedly decided to quit the ruling Narendra Modi led National Democratic Alliance (NDA) government,” Gaurav Jain, Director at Hem Securities, told IANS.
“Negative clues from global markets also affected the sentiments. Most Asian stocks fell as reports of more chaos in the Trump administration tested investors’ nerves, already frayed by fears that US tariffs could hurt the global economy and trigger a trade war,” he added.
Apart from the political concerns, fiscal year-end considerations, selling before the onset of the Long Terms Capital Gains regime from April 1 and a bunch of lined up IPOs also resulted in liquidity being sucked out of the market, said Deepak Jasani, Head – Retail Research, HDFC Securities.
“Broad market indices like the BSE mid-cap and small-cap indices lost less, thereby outperforming the main indices. Sectorally, there were no gainers,” Desai told IANS.
All the 19 sub-indices of the BSE closed in the red, with the S&P BSE auto index slipping by 409.77 points, followed by metal index by 327.44 points, oil and gas index by 320.65 points, banking index by 312.62 points and capital goods index by 309.63 points.
On the currency front, the Indian rupee closed flat at 64.94 against the US dollar from its previous close.
“Yen appreciation also caused weak global markets. On the domestic front, FIIs (foreign institutional investors) have been net sellers in equity markets since last few trading sessions,” said Anita Gandhi, Whole Time Director at Arihant Capital Markets.
In terms of investments, provisional data with the exchanges showed that FIIs sold scrips worth Rs 150.46 crore and domestic institutional investors worth Rs 150.46 crore.
“Series of fresh IPOs are also sucking some amount of liquidity from the markets leading to investors as well as institutions taking some profits. Nearing of financial year end and advance tax payments may also have caused some profit taking,” Gandhi told IANS.
Major Sensex gainers on Friday were: Mahindra and Mahindra, up 0.88 per cent at Rs 741.55; Wipro, up 0.85 per cent at Rs 295.75; Hindustan Unilever, up 0.51 per cent at Rs 1,304; and Yes Bank, up 0.16 per cent at Rs 312.90.
The Sensex losers were: Tata Motors, down 3.67 per cent at Rs 340.10; Tata Motors (DVR), down 3.21 per cent at Rs 190; Asian Paints, down 3.09 per cent at Rs 1,125.05; Adani Ports, down 2.89 per cent at Rs 371.05; and Hero MotoCorp, down 2.67 per cent at Rs 3,546.05.