(MENAFN- Gulf Times)
Gripped by fear psychosis due to geo-political aftershocks, key stock market indices were on a sticky wicket for the fifth day yesterday as both Sensex and Nifty fell over 1% to hit their one-month lows.
The sharp plunge left investors poorer by over Rs95,000 crore as the market cap stood at Rs1,27,08,846 crore. Risk appetite took a hit after the Economic Survey said achieving the high end of the 6.75-7.5% growth projected previously will be difficult.
This is markets' first weekly fall in six. Weakness in the rupee against the American currency and lacklustre global shares dragged down the indices, too.
The BSE 30-share Sensex remained in the negative zone and settled down 317.74 points, or 1.01%, at 31,213.59, its weakest closing since July 4.
The index had tumbled 794.08 points in the last four sessions. The NSE Nifty after cracking the 9,700-mark to hit a low of 9,685.55, finally settled lower 109.45 points, or 1.11%, at 9,710.80, a level last seen on July 7.
For the week, the Sensex and Nifty both recorded first fall in six weeks, by plunging 1,111.82 points, or 3.43%, and 355.60 points, or 3.53%, respectively.
Selling was across the board, led by metal, auto, PSU, realty and infrastructure stocks. Broader markets continued to face selling from retail investors as mid-cap and small-cap indices fell by 0.20% and 0.04%, respectively.
Foreign portfolio investors (FPIs) were net sellers of shares worth Rs1,171.21 crore while domestic institutional investors (DIIs) bought shares worth Rs821.72 crore yesterday, as per provisional data. Consumer durables and healthcare managed to close in the positive terrain on value buying.
Meanwhile the rupee yesterday weakened for third sessions against the US dollar tracking losses in the global equity and currencies markets amid rising tensions between US and North Korea.
The rupee closed at 64.14 a dollar, down 0.09% from its Thursday's close of 64.08. The rupee opened at 64.21 a dollar and touched a high of 64.27 — a level last seen on July 26.
Globally, investors shunned riskier bets after US President Donald Trump issued a fresh warning to North Korea against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory. Bond yield jumped on concerns of higher fiscal deficit after the Reserve Bank of India (RBI) paid lower dividend to the government.
The 10-year bond yield closed at 6.507%, compared to its previous close of 6.494%. Bond yields and prices move in opposite directions.
Analyst said that lower than expected dividend payment by the Reserve Bank of India may affect fiscal math of the government.
RBI on Thursday said it will pay Rs30,659 crore as dividend to the government, less than half the surplus it transferred the previous year. Economists said lower returns from the central bank's foreign asset holdings and the costs of demonetisation — printing new currency notes and managing the increasing liquidity in the banking system — were possible reasons for a fall in RBI's profits.
In February, finance minister Arun Jaitley announced a fiscal deficit target or Rs 3.2% for fiscal year 2017-18. According to Comptroller General of Accounts data, the government already exhausted 80.8% of the fiscal deficit target of Rs5.5tn during April-June.
So far this year, the rupee gained 6.3%, while foreign institutional investors (FIIs) bought $8.98bn and $18.83bn in equity and debt markets, respectively.
Asian currencies were trading lower. Philippines peso was down 0.51%, South Korean won 0.38%, China Renminbi 0.35%, Indonesian rupiah 0.23%, Taiwan dollar 0.17%, Malaysian ringgit 0.1%, Thai Baht 0.05%. However, Japanese yen was up 0.26%.
The dollar index, which measures the US currency's strength against major currencies, was trading at 93.383, down 0.02% from its previous close of 93.401.
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