The stock market tumbled again on Friday, mirroring the selloff in Asian shares, which hit a 20-month low after the overnight fall on Wall Street. The
Sensex and Nifty closed at a 6 1/2 -month low dragged down by lenders led by
Yes Bank after its second quarter earnings disappointed investors.
The Sensex shed 340.78 points, or 1 per cent, to end at 33349.31. The Nifty lost 94.90 points, or 0.94 per cent, to close at 10030. The Sensex fell 2.8 per cent and the Nifty declined 2.6 per cent this week.
Analysts do not expect the bearish sentiment to ebb anytime soon.
“We maintain our cautious view on the market due to a combination of continued premium valuation, despite the correction coupled with the triple macro worries of rising rates, depreciating rupee and political uncertainties,” said CLSA in a note.
The BSE Bankex dropped almost 2 per cent on Friday, taking the loss to 3.1 per cent for the week. Yes Bank slumped 9 per cent after the September quarter results disappointed though the stock recovered from lows. Axis fell 4 per cent and IndusInd slipped 3.1 per cent .
“Foreigners’ overweight on financials remains large, but is above the historical trend and remains vulnerable to any potential macro-led correction,” said CLSA, which is confident about the prospects of HDFC,
HDFC Bank and
IndusInd Bank.
Foreign institutions stepped up their selling, dumping shares worth Rs 1,356.66 crore. So far in October, they have net sold to the tune of over Rs 22,000 crore after dumping shares worth Rs 9,600 crore in September.
Though domestic institutions have almost matched foreign outflows with their purchases, that has not been enough to control the market slide. Domestic institutions, including mutual funds and insurance companies, have net bought shares worth over Rs 18,000 crore in October and Rs 11,400 crore in September.
The
MSCI Asia-Pacific index fell 1.9 per cent on Friday with Hong Kong’s Hang Seng dropping 1.1 per cent and South Korea’s Kospi declining 1.75 per cent. Sentiment in global markets have soured after tech giants Amazon and Alphabet, which owns
Google, missed earnings expectations.