Stock markets close lower on foreign fund outflows, weak rupee

Benchmark stock indices Sensex and Nifty pared most of early losses to close marginally down on Monday amid persistent foreign fund outflows and weak global trends.

The 30-share BSE Sensex closed lower by 54.30 points, or 0.06 per cent, at 85,213.36. The benchmark opened lower and declined further by 427.34 points, or 0.50 per cent, to hit a low of 84,840.32, but value buying in FMCG and IT shares in the second half helped cut losses.

The 50-share NSE Nifty edged lower by 19.65 points, or 0.08 per cent, to 26,027.30. The broader index hit a low of 25,904.75 but pared losses later. The rupee hitting fresh record low against the US dollar and uncertainty over an India-US trade deal weighed on investor sentiment, analysts said. The rupee hit an all-time low of 90.80 against the US dollar on Monday.

Among Sensex firms, Mahindra and Mahindra fell the most by 1.94 per cent. Bajaj Finserv fell by 0.79 per cent and Maruti Suzuki by 0.71 per cent. Adani Ports, Bharti Airtel, Titan, Power Grid and HDFC Bank were also among the laggards.

However, Hindustan Unilever surged the most by 1.42 per cent. Trent, HCL Tech, Asian Paints, and Tata Steel were among the gainers. “Indian equity markets ended today’s session on a muted, consolidative note, recovering from early weakness but lacking meaningful follow-through buying. “Persistent FII selling, rupee depreciation, weakness in Asian equities and India–US trade-related uncertainty kept risk appetite cautious, though domestic flows and bargain hunting helped absorb downside pressure,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

The BSE smallcap gauge climbed 0.41 per cent and midcap index went up by 0.16 per cent.Among sectoral indices, telecommunication declined 0.90 per cent, followed by auto (0.87 per cent), consumer discretionary (0.25 per cent), financial services (0.11 per cent). FMCG climbed 0.56 per cent, followed by services (0.51 per cent), industrials (0.50 per cent), consumer durables (0.46 per cent), BSE Focused IT (0.31 per cent) and IT (0.31 per cent). Meanwhile, official data showed that wholesale price inflation stayed in the negative for the second consecutive month in November at (-) 0.32 per cent, even though there was an uptick in prices of food articles like pulses and vegetables on a month-on-month basis.

Foreign institutional investors (FIIs) offloaded equities worth INR1,114.22 crore on Friday, while domestic institutional investors (DIIs) bought stocks worth INR3,868.94 crore, according to exchange data. In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index ended lower. European markets were trading higher. US markets ended lower on Friday.

“Persistent foreign fund outflows and a weak rupee have kept markets in a narrow range, with currency volatility likely to continue until clarity emerges on the India-US trade deal,” Vinod Nair, Head of Research, Geojit Investments Ltd, said. Brent crude, the global oil benchmark, went up 0.15 per cent to $61.21 per barrel.