Benchmark indices Sensex and Nifty Friday plunged from record highs amid fears that India’s economic slowdown is deepening. The 30-share BSE Sensex fell 336 points, or 0.82 per cent, to close at 40,793.81, while the broader Nifty settled 95.10 points, or 0.78 per cent down, at 12,056.05 ahead of the GDP data release.
The GDP data for the July-September period, released after market hours, showed that growth declined to 4.5 per cent for the September quarter as against 5 per cent in the June quarter.
“Profit booking ahead of economic data and selling pressure in Asian peers due to risk of retaliation from China add volatility in the market. The recent rally has lifted the market to supreme valuation which may limit the headroom of key indices to perform well in the short-term,” said Vinod Nair, head of research at Geojit Financial Servicesd.
Joseph Thomas, head of research, Emkay Wealth Management, said, “Second quarter GDP growth … indicates a slump in economic activity and it has become quite pronounced after a slip to 5 per cent in Q1. This leads up to an annual growth rate of close to 5 per cent. Stronger fiscal stimulus is required to stem this fall without which it could be still lower as we move into next fiscal.”
Investor sentiment in the bygone week was driven by positive news about US-China trade talks progress and continuation of measures by the Centre to boost consumer demand and economic growth. Sectorally, BSE energy, metal, auto, oil and gas, capital goods and FMCG indices fell up to 1.46 per cent. Telecom, realty, utilities and power indices rose up to 2.54 per cent. The broader BSE midcap and smallcap indices rose up to 0.47 per cent. Weak cues from global markets also weighed on the market mood. Jimeet Modi, founder-CEO, SAMCO Securities & StockNote, said, “Markets seem to have achieved a sort of mini-euphoric phase given the relentless rally of about 3 months without any significant correction.”