Equity benchmarks extended their decline for the third straight session on Friday, reflecting investors’ sentiment for safety-first driven by major central banks’ aggressive tightening path to tame elevated inflation, which has darkened the global economic outlook.
The BSE Sensex index declined by 319.3 points to 58,800.42, and the broader NSE Nifty fell by 90.8 points to 17,539.
Power Grid, IndusInd Bank, HDFC, Mahindra & Mahindra, and Axis Bank were the major laggards in early trade within the 30-share Sensex group.
The winners were, however, Tata Steel, Hindustan Unilever, Sun Pharma, Infosys, HCL Technologies, and Dr. Reddy’s.
The Nifty Bank Index fell 0.8 per cent and the Financial Index declined 0.9 per cent.
According to the latest data on the BSE, Foreign Institutional Investors (FIIs) sold shares on Thursday totaling a net Rs 2,509.55 crore.
“The global risk-off is gaining strength aided by the steadily rising dollar. Dollar is rising against all currencies and this will impact capital flows into emerging markets including India. Resumption of FPI buying since July has been supporting the rally in India,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told PTI.
“Now this is under threat with FPIs turning sellers in 5 out of the last 7 days,” said Mr Vijayakumar. The near-term market outlook is bearish, he added.
On Thursday, global equities hit two-year lows, and this week they are down 3 per cent.
Following another day of losses for US equities and rising Treasury yields that highlight tighter monetary policy concerns and a faltering global economy, Asian bourses reflected a sea of red and heading for their sixth weekly decrease.
Regional markets saw a 0.5 per cent decline in MSCI’s largest index of Asia-Pacific equities outside of Japan, which hit a two-year low. This week, it is down 3 per cent. Japan’s Nikkei was closed for a public holiday marking the autumn equinox.
Indeed, after the S&P 500’s Friday closing at its lowest level since June, stocks declined in Hong Kong, Australia, and South Korea, even as US futures were see-sawing between gains and losses, suggesting a more volatile session.