Stock markets fell for the seventh consecutive session on Thursday — their longest losing streak in one-and-a-half years — as blue-chips such as State Bank of India and Infosys were hit by selling by foreign investors amid reports of weak quarterly earnings after demonetisation of Rs 500 and Rs 1,000 notes.
After opening lower, the Sensex touched the day’s low of 25,940.14 on the back of widespread losses in blue-chips, but recovered marginally to close the day lower by 262.78 points, or 1 per cent, at 25,979.60. This is the lowest closing since November 24 when it closed at 25,860.17. The gauge had lost 455.44 points in the last six straight sessions. The NSE Nifty dropped 82.20 points, or 1.02 per cent, to close at 7,979.10 after hovering between 8,046.45 and 7,964.95.
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The rupee also declined by 8 paise to end at 67.99/68.00 to a dollar against the previous close of 67.91/67.92 per dollar.
Analysts said this is its longest falling spell since March 2015. Global indices, too, remained weak in the wake of overnight losses on Wall Street and worries over Italy’s struggling banking sector, which depressed Indian market. The broader NSE Nifty cracked below the 8,000-level and closed at its nearly one-month low, whose fall was the longest since June 2015. The US Federal Reserve’s hawkish interest rate forecast last week had led to foreign selling in emerging markets.
The sentiment remained downbeat as the cash crunch continued to unnerve investors, who were worried about its impact on corporate earnings for the December quarter. Persistent outflows by foreign funds hit it further, brokers said.
According to the Japanese financial services major Nomura, damage to India’s economic growth is likely to be bigger than RBI’s estimates, as there could be a sharper slowdown in the near term and cash shortage is likely to extend to the first quarter of the next year. Investments in domestic capital markets through participatory notes (P-Notes) plunged to its lowest level in nearly three years to Rs 1.79 lakh crore in end-November.
Vinod Nair, head of Research, Geojit BNP Paribas Financial Services, said: “Nifty broke 8,000 mark on continued selling by FIIs. Melting global base metal prices has negatively impacted the domestic metal index which is down by three per cent today. Lack of domestic cues to support under such global headwinds is causing the Indian market to underperform. GST council meet will be under the market’s radar and also expensive consumer oriented companies which are likely to be most impacted in Q3 results.” Adani Ports was the worst-hit, down 3.56 per cent, followed by Tata Steel at 3.09 per cent. Others losers included ONGC, Bharti Airtel, Tata Steel, NTPC, L&T, Infosys and SBI.
The BSE metal index suffered the most by falling 2.78 per cent, followed by infrastructure 2.06 per cent, consumer durables 1.90 per cent and power 1.67 per cent.