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Sensex kicks off July on negative note, sheds 800 points; Nifty50 below 15,600 – Economic Times

NEW DELHI: Benchmark indices opened lower on Friday, largely led by a selling pressure in shares of after the government imposed export duties on petrol diesel and ATF fuel to meet domestic demand and stop refiners making windfall gains.

Stocks also fell as the rupee fell below the 79 mark against the dollar, raising fears of intensified foreign outflows. Asian markets were trading mostly in the red, tracking a weak closing for Wall Street stocks overnight, as investors were anticipating a global slowdown ahead. Further, export duty hike on fuel dented shares of index heavyweight RIL, that tanked over 8 per cent.

At 10.05 am, the BSE Sensex was trading 775 points or 1.46 per cent lower at 52,244. Nifty50 was trading at 15,567, down 213 points or 1.35 per cent.

Among Sensex stocks, Reliance Industries plunged over 5 per cent. Out of the Sensex fall, 500 points were negatively contributed by Reliance Industries. The government has raised export duty on diesel by Rs 13 a litre and on petrol by Rs 6 a litre. It has also – raised export duty on ATF by Re 1 per litre.

This is after the government felt the domestic refiners were increasing exports to make windfall gains of $45-47 per barrel. The government said Indian exporters will have to sell 50 per cent of petrol in domestic market on total shipping bill while they have to sell 30 per cent of diesel in domestic market on total shipping bill.

fell 2.36 per cent to Rs 1,896.70 after the government increased import duty on gold to 12.5 per cent from 7.5 per cent earlier. Dr Reddy’s Labs declined 2.21 per cent to Rs 4,306.45. HDFC, , and fell over 1 per cent each.

SBI, L&T, , and also declined up to 1 per cent.

Gainers included

, which rose 1.26 per cent to Rs 2,731.55. , ITC, TechM and edged up to 0.35 per cent higher.

The weakness in the market was seen amid a falling rupee that depreciated 5 paise further on Friday to hit a new low of 79.11 against the dollar. The rupee opened at 78.99 against the greenback, but soon fell to an all-time low of 79.11 as the session progressed. A weakening rupee makes foreign investments into domestic equities unattractive.

Data showed foreign equity outflows breached the Rs 50,000 crore mark in June, taking year-to-date outflows to Rs 2,17,358 crore. A weakening rupee makes investments in domestic equities unattractive to foreign investors.

The ongoing FPI selling in Indian equities is turning out to be the highest selling spree since the global financial crisis (GFC) of 2008 with a trailing 12-month FPI cumulative selling in the secondary market of $53 billion against $28 billion during the GFC, as per provisional flows data from exchanges,

said in a note.

V K Vijayakumar, Chief Investment Strategist at

noted that the first half of 2022 saw US indices plunging 21 per cent, which was the worst since 1970.

“This weakness has reflected declines in other markets too. But it is important to appreciate the fact that India has outperformed with Nifty correcting only around 9 per cent. With the economy showing signs of “gradual recovery despite global headwinds” (RBI), the prospects for H2 appear better for markets,” Vijayakumar said.

“Leading indicators suggest improving prospects for banking, IT, telecom and autos. Stock price movements in the near-term in July will be in anticipation of better-than-expected Q2 results in these segments. Metals stocks are likely to bottom out absorbing the poor Q1 results,” Vijayakumar said.

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