MUMBAI: Hawkish statements from the US central bank chief on Wednesday night led to a global sell-off in stocks that also weighed on investor sentiment on Dalal Street. Sensex opened weak, remained in the red through the session and closed 964 points down at 79,218 points.
This was the first time since Nov 29 that the index closed below the psychologically important 80K mark, BSE data showed. In the last four sessions the sensex has lost a little over 2,900 points, translating to 3.6%.
On the NSE, the nifty too followed a similar path and closed 247 points lower at 23,952 points. This was nifty’s first close below the 24K mark since Nov 28, NSE data showed. In Thursday’s session selling was across the board with foreign funds again leading. At close, net selling by foreign portfolio investors (FPIs) was Rs 4,225 crore. In comparison, domestic funds were net buyers at Rs 3,943 crore, data from BSE showed.
According to Prashanth Tapse, Senior VP (Research), Mehta Equities, domestic markets tanked tracking negative global cues as benchmark indices slipped below their psychological levels. There was broad-based selling as the US Fed’s hawkish stance raised concerns over further rate cuts next year. “Rising US bond yields have pushed global currencies, including the rupee to new lows while renewed foreign fund outflows from domestic equities could prompt investors to turn risk averse,” he said.
So far in the month, foreign funds are still a net buyer. But this came mainly on the back of their investments in IPOs, market players said. Combined data from NSDL and BSE showed that in Dec, FPIs were net buyers at about Rs 18,350 crore. The day’s slide left investors poorer by Rs 3.8 lakh crore with BSE’s market capitalisation now at nearly Rs 458 lakh crore.
During the session, of the 30 sensex stocks, 27 closed in the red. ICICI Bank, Reliance and HDFC Bank contributed the most to the day’s loss.
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