Led by a drop in share prices of Reliance Industries, stock markets on Monday posted their lowest close in 20 months amidst mounting worries about the global economy after crude oil fell below $28 per barrel, its lowest since 2003, and data showed India’s exports shrunk for the 13th straight month.
The barometer BSE Sensex, shed 266.67 points or 1.09 per cent to settle at 24,188.37, its lowest close since May 16, 2014. The 50-unit Nifty 50 index lost 86.80 points or 1.17 per cent to settle at 7,351, its lowest close since May 30, 2014.
While the BSE Mid-Cap index shed 2.72 per cent, small-cap shares plunged across the board and the BSE Small-Cap index lost 4.05 per cent. The fall in both these indices was higher than the Sensex’s decline in percentage terms.
RIL stock went down 5.14 per cent to settle at Rs 1,018 on the BSE. Intra-day, it tumbled 5.87 per cent to Rs 1,010.10. RIL, which is scheduled to announce the third quarter results on Tuesday, was the top loser on the 30-share Sensex, which dragged down the benchmark. Cairn plummeted by 7.11 per cent to Rs 111.05. Among big losers, BPCL plunged 4.07 per cent and Vedanta by 5.56 per cent.
The rupee fell by 9 paise to 67.68 per dollar on sustained demand for the US currency from banks and importers and the sharp fall in equities. The currency has now dropped by 83 paise or 1.24 per cent in three days.
Jayant Manglik, president, Retail Distribution, Religare Securities, “Indian market continued to slide to end near its 20 months low levels. Nifty ended down at 7,351 near its next key support of 7,350. Global investors have been worried on overall weakness in the world economy along with falling crude and commodity prices. Even at home, our trade deficit widened due to higher gold imports and falling exports. Indian exports tumbled for consecutive 13th months due to lack of global demand and volatile currencies. All sectors saw selling pressure with small-cap and mid-cap indices facing huge sell off.” “Investor sentiments have been dampened across the globe with markets making fresh lows in last few trading sessions. Global factors have been the driving force behind the mayhem seen in the markets. We expect more downside going ahead mostly in small-cap and mid-cap spaces,” he said.
Vinod Nair, head-Fundamental Research, Geojit BNP Paribas Financial, “The fall in crude price to a twelve year low coupled with the anxiety in global markets negatively impacted the sensitive markets. Small and mid-cap stocks tanked the most revealing that retail investors are cautiously selling their exposure and prefer to stay away from this market.”