Stock markets, extended losses to yet another day amid fund outflow-related concerns. BSE benchmark index Sensex fell 154 points to close at 38,157 today, while the NSE Nifty declined 62 points to settle at 11,520.
Weakness prevailed across sectors except IT, which took support from the rupee’s plunge to life-time lows. Top laggards on the 50-scrip Nifty index included State Bank of India, Indiabulls Housing Finance, Grasim Industries, Asian Paints, UltraTech Cement and Titan Company, closing between 3.3 per cent and 4.1 per cent lower.
Economic Affairs Secretary Subhash Chandra Garg said said overseas investors of Indian origin are allowed to buy up to 5 per cent in any security under current regulation.
That extended the downward movement in the markets to a second straight day, as fresh concerns emerged over an April circular issued by regulator Sebi, which indicated tightening of foreign investment rules for companies of Indian origin.
Overall breadth of the markets was sharply negative, with 1,351 decliners and 414 advancers on the NSE. On the BSE, 2,005 stocks advanced while 769 declined.
Mr Garg reiterated that companies majority-owned by non-resident Indians (NRIs) won’t be allowed to invest as well as manage foreign funds.
The rupee declined to a fresh all-time low of 71.43 against the US dollar per dollar, cementing its position as Asia’s worst performing currency so far this year. At this level, the rupee has depreciated more than 10 per cent in calendar year 2018.
Rupee depreciation boosts profitability of exporters such as IT companies. The Nifty IT an NSE sectoral index comprising technology stocks finished the day with a gain of 2.1 per cent. Tata Consultancy Services, Infosys, Wipro and Tech Mahindra rose around 2-3 per cent.
Infosys hit a fresh 52-week high as the shares traded ex-bonus. TCS became the second Indian company to reach a market capitalisation of Rs. 8 lakh crore ($112.53 billion), after Reliance Industries.
Fund outflows continued to pressurise the markets.
Foreign portfolio investors (FPIs) net sold shares worth Rs. 21.13 crore on Monday while net sales by domestic institutional investors (DIIs) stood at Rs. 542.12 crore, according to provisional data from the NSE. Foreign investors offloaded $38.7 million last week.>