Sensex fall continues, dips 318 points

MUMBAI: The equity markets witnessed yet another day of heavy selling knocking down both the Sensex and Nifty to their 19-month low as investors remained risk averse amidst disappointing earnings growth numbers from India Inc and steep fall in global crude oil prices, which triggered panic selling in global stocks. Oil price in the international markets fell below $30 per barrel, raising concern about the health of the global economy as well as growth prospects of major oil producing nations.

After opening the day on a positive note, the Sensex failed to sustain its winning momentum and slumped 317.93 points or 1.28 per cent to end the trading session at 24,455.04, its lowest level since May 29, 2014. The Nifty too slipped below its psychological 7,500 levels to close the day at 7,437.80, losing 99 points or 1.31 per cent.

On Friday, the small and mid cap stocks were battered badly on the domestic bourses leading to 3.13 per cent fall in the BSE small cap index. The BSE mid cap posted a loss of 2.68 per cent.  The persistent weakness in the rupee amid continuous outflow of funds from portfolio investors and increasing demand for dollar from importers also impacted sentiments. The partially convertible rupee ended the day at 67.60 per dollar, down 30 paise from its previous day’s close. According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) sold shares worth Rs 1,123.79 crore.

“There is a high probability that we will see the Sensex at 22,000 level in the foreseeable future,” said Saurabh Mukherjea, chief executive officer (CEO), institutional equities at Ambit Capital, adding that weak corporate earnings, global economic downturn and foreign outflows would put pressure on markets.  

“I won’t be surprised if there is another 5-10 per cent correction in the market,” said Uday Narayan Dubey, vice-president, institutional desk at R.K Global. “There is a fear ab-out further downgrade in earnings growth. Moreover, global factors like the China slowdown and fall in oil prices are expected to impact global economic growth. Since, the Nifty has slipped below 7,500 levels, it is likely to head towards 7,200 levels,” he said and added that the small and mid cap stocks are likely to see major selling in the coming days. Elsewhere in Asia, the Shanghai Composite index plunged 3.51 per cent, while Hang Seng and Kospi Index fell 1.50 per cent. and 1.11 per cent, respectively.