Rs 6000000000000 lost is market, Sensex at 3-month low

Mumbai, Sep 27: Stocks fell on Wednesday for the seventh day in a row as the Sensex plunged a sharp 440 points to close at an over three-month low, triggered by a weakening rupee on concerns that foreign capital will move out sooner than later after US Federal Reserve chair Janet Yellen’s comments.

Yellen, in a speech, said the Fed should stick to gradual rate hikes despite the uncertainty about the inflation trajectory. This was enough for foreign investors to hit the exit button, looking for instruments that yield better returns. The rupee took a hammering, sinking to over a six-month low of 65.75 against the dollar during the day. The lingering Korean stand-off dealt a further blow after US President Donald Trump dialled up his threats saying America is “totally prepared” for a “military option” on North Korea, warning that would be “devastating”.

Updates of military action on the eastern border hastened the market’s fall, which has been on a slippery slope ahead of the derivatives expiry on Thursday. Clearly, it was downhill drive for the BSE benchmark right in the beginning, which settled lower by 439.95 points, or 1.39%, at 31,159.81. This is the weakest closing since 30 June, when the gauge had settled at 30,921.61. It had lost 824 points in the previous six sessions.

Mood was downcast at the 50-share NSE Nifty too, which after regaining the key 9,900-mark at one stage closed down 135.75 points, or 1.38%, at 9,735.75—a level last seen on 11 August when it closed at 9,710.80.

“Market extended losses while the rupee sank to a 6-month low on continued outflow of foreign funds. Additionally, slowdown in GST (goods and service tax) tax collection dented sentiment and investors expected that the GST-led disruption is likely to extend and will hurt earnings for the next few quarters,” said Vinod Nair, head of research, Geojit Financial Services Ltd.

Investors’ wealth as measured by market capitalisation of BSE listed companies took a big knock of Rs1.79 trillion, which read Rs1.30 trillion. From the Sensex bloc, Adani Ports barrelled down 4.85%, followed by SBI 2.89%. The overall losses swelled because of weakness in heavyweight RIL, Dr Reddy’s, Sun Pharma and ICICI Bank. TCS emerged as the big gainer, up 0.62%, while Coal India rose too. Mid-cap and small-cap stocks moved in sync with the benchmarks and dropped by up to 2.10%.

In this bloodbath at the Dalal Street investors have lost a total of Rs 6.18 lakh crore. This is the longest losing streak of 2017. The market capitalisation of all the BSE-listed companies stood at Rs 130,68,465 crore on Wednesday, this is Rs 6.18 lakh crore lower than Rs 136,76,465 lakh crore as on Sept 18. 

As has been the case so far, foreign portfolio investors stayed reluctant towards Indian shares, who net sold shares worth Rs1,915.54 crore. Domestic institutional investors remained true to their form, picking up shares worth a net Rs1,537.10 crore on Wednesday, according to provisional data.

Overseas, most Asian indices ended mixed. Participants waited for key events, including the unveiling of Trump’s tax reforms and the release of Japanese economic data later in the week. European shares moved higher.