Tracking weak regional markets, domestic stock markets, led by Yes Bank and SAIL, on Friday fell 0.85 per cent as investors booked profits following reports of a nuclear test in North Korea and uncertainty over the European Central Bank’s future policy steps after it opted against fresh stimulus.
After opening higher at 29,062.90, the Sensex slipped into negative zone to touch a low of 28,755.08, before settling 248.03 points or 0.85 per cent down at 28,797.25. The 50-issue NSE Nifty cracked below 8,900 by falling 85.80 points or 0.96 per cent to end at 8,866.70. Investors have turned cautious as the government is expected to release industrial production index and inflation data next week, said an analyst.
The rupee declined by 26 paise to end at 66.68, posting its biggest single-day drop in five weeks, on renewed demand for the US currency from banks and importers. The sell-off in equities markets, following the European Central Bank’s decision to keep its monetary policy stance unchanged, mainly weighed heavily on the rupee sentiment. The sentiment remained subdued in the forex and stock markets amid uncertainty over the ECB failure to deliver on new stimulus measures.
The broader markets too felt the heat with BSE mid-cap and small-cap indices falling 0.99 per cent and 0.47 per cent respectively. On a weekly basis, the Sensex climbed 265.14 points or 0.92 per cent and the NSE Nifty rose 57.05 points or 0.64 per cent. Both indices recorded second weekly gains.
Shares of Yes Bank plunged over 4 per cent to Rs 1,277.25 after the company deferred plans to raise $1 billion, citing extreme volatility due to misinterpretation of new QIP guidelines. Top steelmaker SAIL plunged 6 per cent as the company’s standalone net loss widened to Rs 534.92 crore in the June quarter.
Asian stocks ended lower after the ECB surprised markets by deciding not to extend the deadline of its bond-buying programme and North Korea successfully tested a nuclear warhead spooking global investors.
Jayant Manglik, president, Religare Securities, said, “The market lost nearly a per cent, tracking feeble global cues and caution ahead of IIP data. After the recent surge, participants also preferred to book some profit, which added to the pressure. Mostly sectoral indices ended lower in line with the benchmark index. However, the downside remained capped in the cash segment. It’s usual to see a pause or consolidation around the record high and that is what we’re seeing in Nifty now.”
Vinod Nair, head of Research, Geojit BNP Paribas Financial, said, “The market (Nifty) corrected and settled below the important level of 8900 as investors believed that the recent rally was overdone and which prompted them to book profit.”