Markets extend opening losses to trade deeply in red; Sensex falls over 600 points

Indian equity markets continued their bearish trend on yet another day with negative start tracking weakness in global peers coupled with a falling rupee, which opened at a fresh record low of 81.06 per dollar. Markets extended their losses and are trading deeply in red with cut of over a percent each in early deals on Friday. Sensex and Nifty fell below their crucial levels of 58,500 and 17,450, respectively. Some cautiousness came in as ASSOCHAM said India Inc is bracing itself for yet another policy rate hike by the RBI Monetary Policy Committee in the range of 35-50 basis points as the move seems unavoidable in the wake of the global monetary tightening to limit the impact of inflation. Besides, foreign institutional investors (FIIs) have net sold shares worth Rs 2,509.55 crore on September 22, as per provisional data available on the NSE. Market participants overlooked Union Finance Minister Nirmala Sitharaman’s statement that the government was making efforts to keep inflation under 4 per cent and steps were being taken to ensure people get essential goods at fair price and on time.

On the global front, Asian markets are trading lower following the broadly negative cues from global markets overnight, amid continuing concerns about the impending recession and the global economic outlook following the recent aggressive interest rate hikes by the US Fed and other major central banks. The Japanese stock market is closed for Autumnal Equinox holiday on Friday. Back home, IT stocks were in focus amid worries of a slowdown in the world biggest economy. To add to the woes, Accenture’s has issued its first-quarter guidance of $15.20 billion - $15.75 billion, much below the street expectations. In stock specific development, Mahindra & Mahindra Financial Services plunged after the RBI barred the company from carrying out recovery or repossession activity through third-party until further notice.

The BSE Sensex is currently trading at 58491.22, down by 628.50 points or 1.06% after trading in a range of 58446.31 and 59143.32. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.07%, while Small cap index was down by 0.89%.

The only gaining sectoral index on the BSE was Healthcare up by 0.51%, while Bankex down by 1.90%, Auto down by 1.41%, PSU down by 1.31%, Utilities down by 1.28%, Power down by 1.24% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.25%, Sun Pharma up by 0.78%, Hindustan Unilever up by 0.52%, Infosys up by 0.49% and HCL Technologies up by 0.31%. On the flip side, Mahindra & Mahindra down by 2.86%, Indusind Bank down by 2.57%, Kotak Mahindra Bank down by 2.51%, HDFC down by 2.40% and Power Grid down by 2.36% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has said the government was making efforts to keep inflation under 4 per cent and steps were being taken to ensure people get essential goods at fair price and on time. She said steps were being taken to keep inflation at a certain level. On rising prices, she said ‘as far as inflation is concerned, I have been answering questions (on the issue) in Parliament every time they have been raised. Steps were being taken to keep inflation at one level, for example, duty on imported edible oil is being removed so that affordable oil comes into the country.’

She said the issue of inflation should be understood in global context. She added ‘America is experiencing the kind of high inflation which was not witnessed in the last 40 years. Germany is facing high inflation which was not experienced in the last 38 years. We are taking efforts to keep inflation under 4 per cent and efforts were being taken to ensure that people get all goods at fair price and on time.’

About the rupee hitting a record low against the US dollar, Sitharaman said the government looks at every aspect of the economy. She also said ‘Be it inflation, exchange rate...we are looking at everything’. Earlier, Sitharaman had said Mudra loans are given to eligible people without any security.

The CNX Nifty is currently trading at 17437.45, down by 192.35 points or 1.09% after trading in a range of 17436.35 and 17642.15. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.25%, Divi's Lab up by 1.62%, Tata Steel up by 1.21%, Apollo Hospital up by 1.12% and Infosys up by 0.63%. On the flip side, Mahindra & Mahindra down by 3.06%, Power Grid down by 2.61%, Kotak Mahindra Bank down by 2.58%, Indusind Bank down by 2.56% and Bajaj Finance down by 2.53% were the top losers.

Asian markets are trading in red; Straits Times slipped 26.84 points or 0.82% to 3,236.23, Hang Seng plunged 160.53 points or 0.88% to 17,987.42, Taiwan Weighted lost 141.30 points or 0.99% to 14,143.33, KOSPI fell 43.65 points or 1.87% to 2,288.66, Jakarta Composite declined 41.69 points or 0.58% to 7,177.22 and Shanghai Composite was down by 33.58 points or 1.08% to 3,075.33.