Sensex tumbles 439 points, Nifty at 17,482; bank stocks fall
Nifty Bank index was the top loser down by 1.04%, Nifty Metal index losing around a per cent.
Domestic benchmark equity indices opened with a gap down on Friday amid a selloff in cyclical companies that drove major US indexes lower, capping a tumultuous September that marked the S&P 500’s worst month since March 2020. In opening trades, Sensex tumbled 439 points or 0.74% to 58,686 Likewise, the Nifty 50 was quoting at 17,482 declining 135 points or 0.77%.
“The risk-off in equity markets has gathered momentum with sharp cuts in the mother market of the US. The Dow and S&P500 are now more than 5% off from their record highs. Markets, globally, have turned weak. In India too there are indications of a correction. The leader of this rally, IT, is showing signs of exhaustion. When the leader turns weak, the resilience of the market will be tested. Sustained FII selling is another negative signal. The ‘buy on dips’ strategy that has been playing out well since April 2020 may not work so smoothly, going forward. The strengthening of the dollar index (now at 94.30) is negative for emerging markets. If the index rises to 95, there can be big capital outflows,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Gainers & losers
Top gainers & losers on the Sensex.
Sectoral strand
All sectoral indices opened in the red on the NSE. Nifty Bank index was the top loser down by 1.04%, Nifty Metal index losing around a per cent. Nifty IT, Nifty Auto, Nifty FMCG, Nifty Pharma and Nifty Realty indices lost in the range of 0.15-0.80%
The fear gauge index, India VIX spiked by 2.25% to 18.81 levels.
Broader markets
Unlike benchmark indices, broader markets opened mixed. The BSE MidCap index was quoting at 25,184 marginally down by 68 points or 0.27% while the BSE SmallCap index advanced 15 points or 0.06% to 28,097.
The market breadth was flat as 1,224 shares advanced compared to 1,245 declined while 124 remained unchanged.
Global markets
Overseas, Asian stocks slipped on Friday following an overnight drop on Wall Street. Markets in Hong Kong are closed for a holiday on Friday, while those in mainland China are closed for the Golden Week holiday from Friday till October 7.
Japan’s factory activity grew at the slowest rate in seven months in September as overall output and new orders shrank due to the fallout from the coronavirus pandemic, a survey showed on Friday. The final au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) in September slipped to 51.5 on a seasonally adjusted basis from 52.7 in the previous month.
Wall Street ended sharply lower on Thursday wracked by concerns over COVID-19, inflation fears and budget wrangling in Washington.
Investors were also keeping an eye on Washington as Congress passed a bill that would fund the government through early December. The bill would avert a government shutdown but Congress still has not raised the debt ceiling, which Treasury Secretary Janet Yellen says will be reached on October 18.
Yellen and Fed Chair Jerome Powell testified before the House Financial Services Committee on Thursday. Yellen reiterated her call for Congress to raise the debt ceiling, saying that failure to do so would be “catastrophic.”