Negative global cues: Sensex tumbles 433 points as banks, financials bleed

Equities tumbled on Friday, with the Nifty declining by 122.05 points, or 1.08%, to close at 11,178.4 and the Sensex diving 433.15 points, or 1.13%, to close at 37,877.34. The markets declined as investors pruned exposure to banking, financial and consumption stocks amid negative global cues. A higher inflation print added to the negative sentiment.

The Nifty Bank declined 2.33% to close at 21,679.4. The losses in the banking index were led by Bank of Baroda, RBL Bank, IDFC First Bank, Punjab National Bank and Axis Bank. The markets saw its gains fizzle out during the last hour of trade after the European markets were in the red. Banking stocks reacted negatively to the consumer price inflation numbers.

Sorbh Gupta, associate fund manager, Quantum Mutual Fund, said, “Banking stocks fell because of the sharp spike in bond markets because of retail inflation numbers. There is ample liquidity in the market, interest rates have come down and the RBI is keeping an accommodative stance…”

The consumer price index for July was at 6.9% as opposed to 6.2% in June.

The losses in the day’s trading session led to the markets ending the week with losses. The Nifty and Sensex declined by 0.3% and 0.4%, respectively, for the week.

Sanjeev Zarbade, vice president – private client group research, Kotak Securities, said: “The market sentiment remained positive for the better part of the week, but the BSE-30 index lost 0.4% in the current week. Markets were supported by improvement in active Covid-19 cases in India, better-than-expected operating performance in Q1FY20 earnings, and optimistic outlook on the recovery cycle.”

Foreign portfolio investors have also turned buyers for August. They have been pumping capital into the Indian equity markets for four straight months. On Thursday, FPIs bought stocks worth $54.7 million whereas domestic institutional investors sold stocks worth $94.21 million.

The futures and options segment on the NSE witnessed a turnover worth Rs 13.91 lakh crore, against the six-month average of Rs 14.9 lakh crore.

Major gainers on the Nifty were Eicher Motors, Tata Motors, Mahindra and Mahindra, Axis Bank, and Bajaj Finance, which were down by 7.15%, 4.8%, 3.27%, 2.63%, and 2.59%. Significant losers were JSW Steel, Coal India, Sun Pharmaceuticals, Cipla and NTPC, which were up by 2.57%, 2.33%, 1.97%, 1.76% and 1.55%.