Sensex closes 385 points down on fund outflows

Continuing its losing streak for sixth straight day, Sensex on Monday crashed 385 points to hit a six-month low of 25,765.14 following sustained foreign outflows amid uncertainty about the economic impact of the demonetisation move.

Besides, the rupee trading at almost six-month low against the dollar at 68.27 (intra-day) and an imminent hike in US rate in December too forced participants to adopt a cautious stance.

Sentiment was downbeat by the government’s move to withdraw higher-denomination currency notes, which is expected to drag down gross domestic product growth from last fiscal’s 7.6 per cent, while corporate earnings too might see fall notably in the current quarter.

Also, fears that rising US bond yields since Donald Trump’s election to president could accelerate fund outflows from emerging markets, hurting trading sentiments.

The 30-scrip gauge resumed higher, but ended lower by 385.10 points, or 1.47 per cent, at 25,765.14 its lowest since May 24. Intra-day, it shuttled between 26,270.28 and 25,717.93.

The gauge has now fallen by 1,752.54 points in the six sessions on persistent capital outflows by foreign funds amid lingering worries about the economic impact demonetisation.

The 50-share NSE Nifty tumbled 145 points, or 1.80 per cent, to end well below the 8,000-mark at 7,929.10, its lowest level since May 24. It moved between 8,102.45 and 7,916.40 during the session.

Financial and auto stocks led the decline, accounting for two-thirds of the NSE index’s fall, with State Bank of India and ICICI Bank, remaining the major laggards.

As many as 25 Sensex stocks closed with losses, while seven including Wipro, TCS, Sun Pharma, RIL and ONGC ended in the green, which cushioned the fall.

Selling pressure was so strong, all the sectoral indices led by realty, metal and PSU, falling by up to 4.71 per cent. Broader markets too remained under pressure, with the BSE small-cap index declining 3.16 per cent and the mid-cap 2.80 per cent.

Foreign portfolio investors (FPIs) sold shares worth Rs 926.32 crores last Friday, provisional data showed.

On the other hand, at other Asian bourses, Japanese stocks extended their recent rally and gained 0.77 per cent as the dollar consolidated gains against the yen, with investors betting on a US interest rate rise next month. Hong Kong’s Hang Seng rose 0.06 per cent, while Shanghai Composite up 0.79 per cent.

However, European markets were down in their late morning trade, reversing initial gains with Frankfurt’s DAX 30 falling 0.45 per cent, the Paris CAC 40 shed 0.36 per cent, while London’s benchmark FTSE 100 index eased 0.19 per cent.