Investors lose Rs 2 lakh cr in a day as weak global sentiment weighs on Nifty, Sensex

The Indian market suffered sharp losses on September 25, a day before the September futures and options expiry, as weak global sentiment made investors take money off the table and avoid fresh bets on riskier equities.

Global sentiments turned negative after US lawmakers, on September 24, called for an impeachment inquiry into President Donald Trump, increasing the prospects of prolonged political uncertainty in the world’s largest economy.

Back home, the exuberance over the corporate tax rate cut seems to have fizzled out amid the lingering concerns over the health of the economy. The RBI monetary policy outcome on October 4 and September quarter earnings next month are the two major factors that will dominate the mood of the market going forward.

Other than the weak global sentiment, market experts believe the reports of government’s plan to strategic disinvest PSUs also contributed to the fall in the market.

“Political Uncertainty in the US amidst impeachment talks pulled indices lower today. Afternoon trade witnessed heightened selling led by PSU Banks amid reports of SUUTI stake sale,” said S Ranganathan, Head of Research at LKP Securities.

Sensex broke the winning streak of the last three consecutive sessions, falling 504 points, or 1.29 percent, to 38,593.52.

Only six stocks – Power Grid Corporation, Tata Consultancy Services, NTPC, HCL Technologies, Tech Mahindra and Reliance Industries – in the 30- share pack managed to settle in the green.

State Bank of India led the pack of losers in the index, followed by Tata Motors, Maruti Suzuki, Yes Bank and Mahindra & Mahindra.

The overall market capitalisation of BSE-listed firms dropped to Rs 1.47 lakh crore from Rs 1.49 lakh crore in the previous session, making investors poorer by about Rs 2 lakh crore in a single day.

The Nifty index fell for the second consecutive day, ending the day at 11,440.20, down 148 points or 1.28 percent. This was the second biggest single-day fall this month for the index. Among the 50 stocks, 37 suffered losses.

In the broader markets, BSE Midcap and Smallcap underperformed Sensex, closing the day with losses of 1.76 percent and 1.50 percent, respectively.

Among the sectoral indices, barring BSE Power (up 1.05 percent), Utilities (up 0.55 percent), IT (up 0.42 percent) and Teck (up 0.14 percent), all others ended with losses.

BSE Auto, with a loss of 3.84 percent, emerged as the top loser among the sectoral indices, followed by Realty (down 3.10 percent) and Metal (down 2.63 percent).

The breadth of the market remained strongly tilted towards the decliners as 1,755 stocks declined on BSE against 762 that logged gains.

Top news of the day:

The government has sought Cabinet nod for ‘strategic disinvestment’ in BPCL, Container Corporation (CONCOR), Shipping Corporation of India (SCI), THDC and NEEPCO, sources told CNBC-TV18.

Maruti Suzuki, India’s largest carmaker, has voluntarily slashed prices on a select range of cars including Swift, Brezza and Baleno to pass on the benefit of corporate tax reduction to customers.

The 23-year-old student, who accused former union minister Chinmayanand of rape, was arrested on September 25 on charges of extortion, police sources said.

According to HRD Ministry officials, the proposed Higher Education Commission of India (HECI), which is set to replace the UGC, will also take over the All India Council of Technical Education (AICTE) and a bill in this regard will be placed before the Cabinet next month.

Stocks in news:

Shares of Yes Bank fell 4.19 percent to Rs 53.70 on the BSE on September 25 even as the private lender said it was on course to raising growth capital.

Marking their biggest single-day fall in four years, shares of State Bank of India closed 7.37 percent down at Rs 280.15 after the company linked home loans to the repo rate. Moreover, Morgan Stanley has downgraded the stock to equal-weight from overweight with a target price of Rs 330 per share.

Shares of Morepen Laboratories tanked 20 percent to Rs 17.40, a day after SEBI prohibited the company from accessing the security market for a year.

Extending their winning run into the fourth consecutive session, shares of IDBI Bank surged 7.91 percent to close at Rs 36.85 amid reports that the bank is selling its stressed loans to raise funds.

Share price of Indiabulls Housing Finance fell 3.20 percent to Rs 420.75 after rating agency CARE revised its credit rating. CARE has revised the long-term rating from CARE AAA to CARE AA+, the perpetual debt programme rating from CARE AA+ to CARE AA, and reaffirmed short-term rating at CARE A1+.

Shares of Zee Entertainment declined 2.65 percent to Rs 271.90 after Essel Group said its lenders have unanimously agreed to extend the timeline for making pending payments.

Shares of Maruti Suzuki cracked 5.25 percent to settle at Rs 6,641.50 after the company decided to reduce the price of select models.

Global updates:

European shares were on course for their worst day in more than a month on Wednesday, as an impeachment inquiry into the US President Donald Trump and worsening rhetoric on the US-China trade relations fanned fears about global economic growth, reported Reuters.

Among the Asian peers, China’s Shanghai Composite Index fell 1 percent to 2,955.43, while Korea’s Kospi declined 1.32 percent to end at 2,073.39, Japan’s Nikkei ended 0.36 percnt lower at 22,020.15.

Technical view on the market:

The Nifty index formed a bearish belt hold pattern on the daily charts.

“Profit booking was visible in the market today, including in the broader end. As a result, Nifty entered the gap area that it had left on the daily chart recently,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.

“The lower end of the gap area and the 38.2 percent retracement of the recent rise i.e. 11,380 – 11,300 will act as a near-term support zone,” he added.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.