Snapping a four-day winning rally, India’s equity market benchmarks – BSE Sensex and NSE Nifty50 – took a beating on Friday due to a global sell-off, triggered by operating system issues that caused devices to crash worldwide. Premium valuation concerns and investors deciding to book profit ahead of the Union Budget due on Tuesday next week also dampened sentiments.
At close, the Sensex was down 0.91% at 80,604 and the Nifty was down 1.09% at 24,530. The selling was so widespread that only 858 shares registered on the BSE gained while 3,071 shares declined and 81 were unchanged. The broader markets logged a decline for the second straight day as midcap and smallcap indices fell 2.3 and 2.2%, respectively.
In total, investors lost almost Rs 8 lakh crore on Friday as the market capitalization of BSE-listed firms fell to Rs 446.38 lakh crore on Friday against Rs 454.32 lakh crore in Thursday’s session.
“The global IT outage has led to disruptions in various Indian industries. The overvalued market is also experiencing profit booking ahead of the budget next week. The recent performance has been bullish in anticipation of pro industry and populist measures," said Vinod Nair, Head of Research, Geojit Financial Services.
Ajit Mishra, SVP, Research, Religare Broking, said this decline signals caution ahead of the Union Budget, as participants chose to book profits. “We may see further dips in the Nifty, with the next crucial support at the 24,150 level, corresponding to the 20 DEMA. Traders are advised to avoid aggressive positions and opt for hedged trades. It is also recommended to focus on index majors rather than midcap and smallcap stocks for now,” added Mishra.
Sector-wise, metal and realty stocks plunged the most with their respective indices falling up to four per cent. Energy and auto index were also the laggards, crashing over two per cent each.
Among the Nifty50 stocks, Tata Steel, BPCL, JSW Steel, Hindalco, NTPC, Tata Motors, ONGC, Coal India, Ultratech Cement and Wipro fell between 3 per cent and 5 per cent. Only four stocks in the index managed to close in green while the other 46 registered decline.
Vikram Kasat, Head of Advisory at Prabhudas Lilladher, said that throughout the Friday session, IT remained resilient but gave up all gains to end lower as the overall negative sentiment dragged the index. This comes after Infosys reported robust Q1 numbers, leading to a host of positive brokerage views on the counter. He added that market experts believe that the worst for IT companies is over and they see a light at the end of the tunnel.
