Overpowering the bulls in four out of the five trading sessions this week, bears tightened their grip over the market on Friday as the benchmark BSE Sensex tanked by 562.88 points to hit nearly 14-month low of 25,201.90 amid heavy selling due to lacklustre global cues ahead of the US jobs data.
According to the analysts, a strong set of non-farm jobs data is expected to cement Fed's stance for a rate hike in September. "The prospect of a higher US rate, which leads to risk aversion in riskier assets, has so far roiled the scene in emerging markets, which have run up massive losses of late," they said.
As per weekly estimation, the Sensex turned much weaker by 1,190.48 points, or 4.51 per cent, and Nifty retreated 346.90 points, or 4.33 per cent. This is the fourth straight weekly plunge for both the indices.
Investor wealth slumped by Rs1.92 lakh crore on Friday as the BSE benchmark Sensex plummeted by 563 points following heavy selling in global stocks ahead of the US jobs data.
The 30-share Sensex plunged 562.88 points to settle at 25,201.90. Friday’s closing was the lowest level since July 14, 2014 when the index had closed at 25,006.98.
Following the sharp decline in stocks, the market capitalisation of BSE-listed companies fell by Rs1,92,604.36 crore to Rs93,83,643 crore.
"Indian indices remained under pressure primarily on account of the sustained global risk-off trend, which has had its impact on stock markets across the world.
Meanwhile, the rupee also lost some muscle against the dollar, ending at 66.46, which fed the fears further. The signals from Europe that it's willing to shore up its economy were not enough to assuage the fears of foreign investors.
The 30-share index remained off-colour for a major part of the day and touched a low of 25,119.06 before ending at 25,201.90, a steep fall of 562.88 points, or 2.18 per cent. The broader NSE Nifty too came under all-round selling and slipped below the crucial 7,700-mark to settle lower by 167.95 points, or 2.15 per cent, at 7,655.05.
"Indian indices remained under pressure primarily on account of the sustained global risk-off trend. Concerns with respect to the Chinese economy slowdown and the stance of the US Fed continued to affect investor sentiment," said Hitesh Agrawal - Head, Research, Reliance Securities.
The red mark stood out as 28 of the 30-share Sensex pack fell. Vedanta sank the most, down 4.84 per cent, followed by GAIl, Tata Steel and Hindalco. Talking of sectors, BSE realty bled the most by plunging 3.32 per cent while infra, power, banking and healthcare too contributed to the fall.
In broader markets, small-cap and mid-cap indices closed lower by 2.47 per cent and 1.90 per cent, respectively. Elsewhere in Asia, Japan's Nikkei fell 2.15 per cent and Hong Kong's Hang Seng shed 0.45 per cent while Chinese markets remained shut on Friday. European markets also were in deep red in anticipation of a strong US jobs report.
"Comments coming out of G20 meet of finance ministers and central bank governors may also set cues for next week's opening," said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas.
Foreign investors continued to pull out of equities as they net sold shares worth Rs394.31 crore yesterday, according to provisional data. The market breadth turned negative as 2,116 stocks ended lower, 574 stocks closed higher while 89 stayed flat. The total turnover rose to Rs2,689.66 crore, from Rs2,362.85 crore on Thursday.
"This is a good opportunity to invest in quality stocks. In the medium term, we have room for further 50 bps cut in interest rate by the end of the year, adjusted to the US rate hike expectation and a likely intervention by China/EMs governments to stimulate the economy," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
"The sectors we should focus on are IT, pharma, auto, consumer durables, private banks and infra," he added.