NEW DELHI: Stock benchmark indices reversed their early gains during the last hour of trade today to settle in the red for the third session in a row amid lingering liquidity concerns, a fresh fall in the rupee and a jump in crude oil prices.
Selling in index heavyweight Reliance Industries weighed too.
The BSE Sensex closed down 181.25 points, or 0.53 per cent, at 34,134.38, coming off 614 points from day’s high. RIL contributed to more than half of the decline in the Sensex.
IndusInd Bank was the worst Sensex performer as it lost 8.52 per cent.
RIL, YES Bank, ONGC, Asian Paints and Kotak Mahindra Bank were among other losers in the Sensex kitty of stocks. Each of these gave up 3.5-2.75 per cent.
ICICI Bank, NTPC, Bajaj Auto, HDFC Bank And Bharti Airtel emerged as Sensex gainers.
The NSE Nifty settled the day marginally below the 10,250 mark. The index shut shop at 10,245.25, down 58.30 points, or 0.57 per cent. In the 50-share index, 16 stocks settled in the green, 33 in the red and one remained unchanged.
Among Nifty’s sectoral indices, only two – auto and financials – managed to register gains. Metals, PSU Bank and IT stocks were among the worst hit sectors.
On the BSE, the advance-decline ratio stood at 1:2, meaning rise in every stock was followed by a decline in two stocks.
Factors that dragged down the market today:
1. Liquidity woes
The negative outlook regarding liquidity in the stock market and a subsequent contagion for most NBFC and HFC companies unnerved markets once again today.
2. Fresh fall in rupee
The domestic rupee once again slipped against the dollar on Monday. The domestic unit lost over 10 paise from its previous close and 30 paise from its intraday high level. The rupee was trading at 73.43 against the greenback at the time of writing this report.
3. Brent back above $80
Oil edged above $80 a barrel on Monday, lifted by nervousness over a worsening diplomatic crisis between Saudi Arabia and the West, just two weeks before US sanctions potentially choke off Iranian crude supplies, according to a Reuters report.
Benchmark Brent crude oil futures rose 45 cents on the day to $80.23 a barrel by 0900 GMT while US crude futures rose 31 cents to $69.43.
Vinod Nair, Head of Research, Geojit Financial Services
“Despite a positive opening in the global market, the Nifty traded range bound and ended on a negative note due to concerns on liquidity and interest rate. Mid and small caps underperformed while mixed earnings from index heavyweights hit investor sentiment. There is a risk of earnings to downgrade in future since Nifty50-index earnings growth is less than 10 per cent in HIFY19, based on Q1FY19 review and Q2FY19 preview.”
Source: Economic Times