Sensex crashes, Nifty sees 2017’s biggest fall

Deccan Chronicle.  | Deccan Chronicle

Business, Market

The 50-share NSE Nifty posted its biggest single day fall in 2017 and slipped below its key psychological support of 10K level mark.

A broker in sad mood after market BSE Sensex crashed. (Photo: File/PTI)

Mumbai: The equity markets plunged sharply on Friday while the rupee slumped to a near six-month low against the dollar amidst concern that the latest stimulus plan to revive domestic growth would have an adverse impact on India’s fiscal deficit. 

The lingering tension in the Korean peninsula, China’s credit downgrade by S&P Global ratings and US Federal Reserve’s hint about a December rate hike further dampened the sentiments on the domestic bourses. 

The 50-share NSE Nifty posted its biggest single day fall in 2017 and slipped below its key psychological support of 10K level mark. 

After opening the day on a weak note, the Nifty witnessed a steep fall to end the trading session at 9,964.40, down 157.50 or 1.56 per cent. 

The BSE Sensex slumped 447.60 points or 1.38 per cent to end the day at 31,922.44. 

“Indian markets corrected as the local and global news flows remained negative,” said Vaibhav Agrawal, head of research at Angel Broking. 

According to him, the finance minister’s statement of providing Rs 50,000 crore stimulus package to fight the slowdown was seen negatively by the market as this means tossing the fiscal prudence maintained over past few years. 

“Globally, Federal Reserve’s hint about a rate hike as well as China downgrade and rising geopolitical tensions between the US and North Korea also hit the investor sentiment,” he added.

According to the provisional data, FPIs offloaded equities worth Rs 1,241.73 crore. The weakness in the equities was also felt in the forex market with the rupee hitting a low of 65.11, a level last seen on April 5 amidst concern regarding India’s fiscal deficit. 

However, the rupee recovered in the intra-day trade to end the day at 64.79 per dollar. Commenting on the impact of geo-political tension on the equity markets, Arun Thukral, MD & CEO of Axis Securities said, “History tells us that such events invite sharp reactions from equity markets and the pessimism is short lived; time and again the markets have bounced back with fresh vigor. Investors who have been waiting for correction should take the opportunity to add quality stocks to portfolio”.

India’s volatility index (VIX), which measures investors expectation about the near term volatility jumped 10.12 per cent on the National Stock Exchange (NSE) signalling the high amount of nervousness in the market. 

The broader market remained extremely weak with 2139 stocks traded on BSE closing the day deep in red as compared to just 484 stocks that advanced. 

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