Mumbai: Benchmark equity indices gave up intraday gains to end down 1 per cent — the worst one-day decline in two-weeks — as fall in the rupee, weakness in Asian markets and rebound in oil prices dampened sentiment.
Oil prices rose on Monday after Saudi Arabia — a top exporter — announced a cut in supply for December. The move is being seen as a measure to halt the market slump which saw crude prices decline by 20 per cent since early October.
The BSE Sensex ended down 345.56 points, or 1 per cent, at 34,812.99 and the NSE Nifty ended down 103 points, or 1 per cent, at 10,482.20.
Broader markets also saw deep losses, with the BSE MidCap and SmallCap indices ending down 0.9 per cent and 0.8 per cent, respectively.
Tata MotorsNSE -3.39 % ended down 4.8 per cent at Rs 185.95 as Jaguar Land Rover’s total retail sales fell 4.6 per cent in October. Mahindra & Mahindra, YES Bank, Vedanta, Maruti Suzuki India, Power Grid and Hero MotoCorp were also among the worst performers on the Sensex, down 2 per cent-4 per cent.
The weakness of the rupee helped information technology stocks, with Infosys gaining 0.4 per cent and Tata Consultancy Services ending up 0.3 per cent. Tata Steel was the top Sensex gainer, ending up 1.7 per cent atRs 582.90.
The market breadth was in favour of the sellers as 41 out of the 50 Nifty constituents ended in the red. The volatility gauge, India VIX, surged 9 per cent to 19.4.
Foreign portfolio investors net bought Indian shares worth Rs 832.15 crore on Monday while Domestic institutional investors net sold Indian shares worth Rs 1,073.84 crore, provisional data showed.
Piyush Garg, chief investment officer at ICICI Securities, believes oil is a threat but there are other factors also which are weighing on the market.
“GST collections are seeing a shortfall, there is growth concern because of the NBFC sector, which is getting de-rated, earnings are being scaled down and likely slower credit growth in the next two quarters which may pull down GDP growth,” said Garg.
Oil prices may move in the $70 to $75 per barrel range for some time, added Garg.
Fall in oil prices have partly helped markets rise in recent weeks.
Andrew Holland, CEO at Avendus Capital-Alternate Strategies, said oil prices have not seen a big impact of the supply cut and the latest inflation data is also a positive. Data released after market hours on Monday showed consumer inflation has eased in October while industrial production expanded in September.
“State elections will be watched going ahead. There could be a sentimental impact. The RBI Board meeting on November 19 will also be watched by the market,” said Holland.
Source: economictimes.indiatimes.com