New Delhi: India’s stock benchmarks collapsed Friday, ending a three-day winning streak as investors worried about foreign fund outflows after US inflation data marked the largest annual rise in 40 years. The 30-share BSE Sensex fell 773 points, or 1.31 percent, to close at 58,153, while the broader NSE Nifty was down 231 points, or 1.31 percent, at 17,375.
Mid and small cap stocks ended in negative territory as the Nifty Midcap 100 index fell 2.02 percent and the Nifty Smallcap 100 index fell 2.37 percent.
All 15 sector meters – compiled by the National Stock Exchange – were settled in red. Nifty IT underperformed the index, falling as much as 2.72 percent.
US data shows that consumer prices rose 7.5 percent year-on-year in January. Sentiment soured further after James Bullard, president of the St. Louis Federal Reserve Bank, said the data had made him more “dramatically” aggressive. Bullard, a voting member of the Fed’s rate-setting committee this year, said he now wants full percentage point rate hikes by July 1.
Meanwhile, the Reserve Bank of India (RBI) has kept its key rate unchanged to support economic growth. The central bank’s Monetary Policy Committee (MPC) held the lending rate, or repo rate, at 4 percent and the reverse repo rate, or key borrowing rate, at 3.35 percent.
“There was some post-policy enthusiasm (RBI). But with global signals, the (foreign) outflows will happen again. While we are currently in a status quo, if the rate hike in the US happens in March, the outflows will continue.” Anita Gandhi, director of Arihant Capital Markets, told Reuters news agency.
Foreign investors have sold $5.58 billion worth of Indian stocks so far this year, Reuters data shows, compared to a net purchase of $5.08 billion in the same period last year.
On a stock-specific front, Grasim Industries was the best laggard as the stock fell 3.39 percent to Rs 1,708.60. Tech Mahindra, Infosys, UPL and HCL Tech were also among the losers.
Also, Zomato fell 5.98 percent as the food delivery company’s costs were higher in the third quarter (Q3) at Rs 1,642.6 crore as compared to Rs 755.7 crore in the same period last fiscal year.
On the other hand, IOC, IndusInd Bank, Tata Steel, NTPC and BPCL were among the winners.
Overall market size was weak as 934 shares rose while 2,373 fell on BSE.
On the 30-share BSE platform, TechM, Infosys, HCL Tech, Kotak Mahindra Bank, UltraTech Cements and Wipro suffered the most losses with a whopping 2.94 percent drop.
And Tata Steel, IndusInd Bank, NTPC, M&M and ITC were among the winners.
“Technically, 17,250 and 17,450 are immediate support and resistance in Nifty 50, respectively. For Bank Nifty, 38,200 and 38,800 are immediate support and resistance, respectively,” said Mohit Nigam, Head – PMS, Hem Securities.