Stock markets drop amid relentless foreign fund outflows

Stock markets extended the losing run to the fourth consecutive day on Wednesday as persistent foreign fund outflows and the rupee breaching the psychological 90-to-dollar low hit investor sentiment, dragging the benchmark Sensex down by 31 points.

Falling for the fourth day in a row, the 30-share BSE Sensex dipped 31.46 points or 0.04 per cent to settle at 85,106.81. The index opened lower and dropped further by 374.63 points or 0.44 per cent to hit a low of 84,763.64 due to profit-taking. Gains in IT and blue-chip ICICI Bank and HDFC Bank, however, helped the barometer pare some losses in the pre-close session.

The 50-share NSE Nifty skidded 46.20 points or 0.18 per cent to 25,986. After a flat start, the Nifty drifted gradually lower in early trade and then remained range-bound for most of the session.

Among Sensex firms, Bharat Electronics fell the most by 2.13 per cent. Mahindra & Mahindra, Titan, NTPC, State Bank of India, Adani Ports, Tata Motors Passenger Vehicles and Bajaj Finserv were also among the major laggards.

IT shares rebounded as the rupee fell below 90 per dollar. TCS was the biggest Sensex gainer, rising by 1.41 per cent. Infosys rose 1.12 per cent while ICICI Bank and HDFC Bank also advanced.

“Equity markets ended lower as the continued slide in the Indian rupee — which hit a fresh record low against the US dollar — prompted foreign portfolio investors to lock in profits, with the currency weakness weighing on their dollar-adjusted returns,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.The BSE midcap gauge dropped 0.95 per cent and smallcap index dipped 0.43 per cent.

 Among sectoral indices, capital goods tanked 1.31 per cent, followed by consumer durables (1.24 per cent), auto (1.12 per cent), power (1.05 per cent), industrials (0.99 per cent), services(0.97 per cent), consumer discretionary (0.93 per cent) and utilities (0.85 per cent).

BSE Focused IT climbed 0.79 per cent, IT jumped 0.78 per cent, while teck (0.41 per cent), telecommunication (0.29 per cent) and bankex (0.19 per cent) advanced.

“Markets witnessed a volatile session and ended marginally lower, extending the ongoing consolidation phase. After a flat start, the Nifty drifted gradually lower in early trade and then remained range-bound for most of the session. A late rebound in the last half hour helped trim losses, and the index eventually settled at 25,986.

“Sentiment was dampened by a weakening rupee, which hit a record low against the dollar, heightening concerns around import costs and triggering FII outflows. In addition, caution ahead of the MPC meeting and mixed global cues added to the subdued mood,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,642.30 crore on Tuesday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 4,645.94 crore, according to exchange data.In Asian markets, South Korea’s Kospi and Japan’s Nikkei 225 index settled in the positive territory, while Shanghai’s SSE Composite Index and Hong Kong’s Hang Seng index ended lower.

Markets in Europe were trading mostly higher. US markets ended higher on Tuesday.Brent crude, the global oil benchmark, jumped 0.99 per cent at USD 63.07 per barrel.Falling for the third straight session on Tuesday, the Sensex tumbled 503.63 points or 0.59 per cent to settle at 85,138.27. The Nifty declined 143.55 points or 0.55 per cent to 26,032.20.