Sensex Plunged 343 Points, Nifty Settles at 10,124

A series of defaults at major non-banking financial company IL&FS sparked concerns of a liquidity crunch in the sector.

Domestic stocks markets, declined 1 per cent amid a global selloff today, amid concerns about a slowdown in the world economy.

BSE benchmark index Sensex plunged 343 points to close at 33,690 while the NSE Nifty declined 99 points to settle at 10,124.

Across the board selling led primarily by banking, financial services metals and pharma spaces on continued liquidity crunch dragged the markets lower.

Analysts say that while Thursday’s correction triggered by global cues, prevailing concerns about the non-banking financial company (NBFC) space are expected to keep the upside in check.

Things to know:

1) Top laggards on the 50-scrip Nifty index included Bharti Airtel, Indiabulls Housing Finance, Vedanta, Hindalco, ONGC and Tata Motors, finishing between 2.8 per cent and 5.9 per cent lower. HDFC or Housing Development Finance Corporation, finishing 2 per cent lower, was the biggest drag on the Nifty.

2) Caution prevailed among investors ahead of the expiry of derivatives (futures & options) contracts for the month of September by the end of the session.

3) A series of defaults at major non-banking financial company IL&FS sparked concerns of a liquidity crunch in the sector, and have soured trading sentiment. Analysts expect some more correction going forward.

4) “We are in a bear face of a market… Next three months will be a very big crisis time for India,” AK Prabhakar, head of research, IDBI Capital Markets, told. “This is a healthy correction for the markets and will continue. The IL&FS problem has come to the fore.”

5) The Nifty Financial Services index declined 1.2 per cent. Shares of non-banking financial companies (NBFCs) also took a beating. Indiabulls Housing Finance, Dewan Housing Finance and Repco Home Finance declined fell 5.6 percent 3.1 per cent and 2.5 per cent respectively.

6) Shares in telecom major Bharti Airtel ended 6.3 per cent lower, ahead of release of its earnings for the July-September quarter later in the day.

7) On the other hand, Shares in InterGlobe Aviation, owner of airline IndiGo, rose 8.2 per cent, a day after the company posted its first ever quarterly loss since its market debut in 2015.

8) Other Asian equities plunged after tech stocks caused the largest daily decline on Wall Street since 2011 in the previous session, wiping out all its gains for the year. Factors ranging from faster rate hikes in the United States to an ongoing Sino-US trade war that threatens to hurt world growth have continued to make investors jittery.

9) “The fall in the US market is likely a result of fears around slowing economic activity in the United States,” quoted Sunil Sharma, chief investment officer with Sanctum Wealth Management, as saying.

10) Meanwhile, net sale of equities by foreign institutional investors (FIIs) stood at Rs. 2,046.54 crore on Wednesday while net purchases by domestic institutional investors were at Rs. 1,873.51 crore, provisional data from the NSE showed.

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