Benchmark stock indices plunged more than 1.7% on Friday owing to selling pressure and on account of weak global cues.
The S&P BSE Sensex plunged 1,020.80 points, or 1.73%, to 58,098.92 points. Sensex stocks which lost the most include Power Grid (7.93%), M&M (3%), State Bank (2.99%), Bajaj Finserv (2.8%), Bajaj Finance (2.80%) and NTPC (2.78%).
The NSE Nifty-50 index too slid 302.45 points, or 1.72%, to 17,327.35.
“Selling pressure was widespread wherein banking, energy and realty were among the top losers,” said Ajit Mishra, VP – Research, Religare Broking Ltd. “Markets are finally witnessing pressure after showing resilience for quite some time and indications are pointing towards further decline,” he added.
Vinod Nair, head of Research at Geojit Financial services said though the U.S. Fed’s 75-basis point rate increase was anticipated, the sustained aggressive stance indicating 125 bps increases in the next two policy meetings by December 2022 had spooked the market.
“The rupee fell to a new record low as FIIs began selling. The extended hawkish monetary policy is bound to further slow down the global growth engine,” he said.
”India is in a better position with a decoupled economy with pickup in credit growth and tax collection. However, rise in geopolitical risk and economic slowdown will affect India with a lag and weaken performance in the short-term,” he added.
For the week ahead, he said investors would keenly watch the outcome of the RBI monetary policy on September 30. “We expect the market direction will be led by global developments and FIIs’ action. On the valuation front, India is the most expensive stock market in the world today. Therefore, investors are advised to wait and watch until the dust settles,” Mr. Nair said.
The slump in the rupee was also aided by U.S. dollar outflow following the sell-off in equities. The Indian unit closed at 81.09 against the dollar on Friday, down 30 paise. Intraday, the rupee had sunk to 81.22. Analysts said the RBI had intervened to arrest the fall.