The positive start soon gave way to nervousness as the BSE index cracked below 33,000, but finally ended at 33,033.56 — a three week low — down 281 points, or 0.84%.
The barometer rose a cumulative 95.75 points in the past two sessions. The NSE Nifty settled the day lower 96.80 points, or 0.94%, at 10,224.95 after shuttling between 10,334.15 and 10,216.25 during the day.
“Domestic investors turned cautious giving more weight to slowdown in IIP to 3.8%, geopolitical tensions in the Middle-East and continued advancement in crude prices. Despite significant tax relief at the recent GST council meet, expectation of rise in CPI and WPI inflation added to the cautiousness,” said Vinod Nair, head of research, Geojit Financial Services.
Industrial production (IIP) grew at a slower pace of 3.8% in September 2017 compared to 5% in September 2016 and 4.5% in August this year, data released by the Central Statistics Office showed on Friday.
The rupee had its own share of travails, which lost as much as 35 paise against the dollar during the day on fears that the tax rate decision of the GST Council will have a revenue implication of Rs20,000 crore annually. Investors also kept an eye on Brent crude prices and the fast-developing West Asian crisis.
Asian and European markets were not inspiring either. US stocks on Friday too closed lower hit by fears of a delay in corporate tax cuts. With this decline, total market capitalisation of BSE listed companies shrank by Rs31,876 crore to Rs143.8tn.
Adani Ports sank the most, down 4.11%, after its logistics arm reported a dip in quarterly earnings. ONGC, Coal India, HDFC and L&T also ended on the losers’ side. Idea Cellular was also down 3.61% after the telecom operator logged a consolidated net loss for the September quarter.
Foreign portfolio investors dumped shares worth a net Rs529.22 crore, while domestic institutional investors bought equities worth Rs1,920.87 crore last Friday, according to provisional data.
In sectoral play, telecom fell the most losing 1.94%, followed by metal, consumer durables and capital goods. Broader markets lay low too as small-cap and mid-cap indices fell by up to 0.41%.
Meanwhile the rupee yesterday closed at six-week low against the US dollar after local equity markets fell 281 points on the concerns of widening fiscal deficit after the government reduced goods and services tax on some items.
The home currency closed at 65.43 against the dollar — a level last seen on October 3, down 0.41% from its Friday’s close of 65.17. The rupee opened at 65.38 a dollar and touched a low of 65.53.
Bond yields hit a fresh six-month high, after the Reserve Bank of India (RBI) announced another open market debt sale. RBI plans to sell as much as Rs10,000 crore of bonds via open market operations on November 23.
The 10-year bond yield ended at 6.972%, a level last seen on May 2, compared to its previous close of 6.957%. Bond yields and prices move in opposite directions.
So far this year, the rupee has gained 3.8%, while foreign institutional investors have bought $7.31bn and $22.42bn in equity and debt, respectively.
Asian currencies were trading mixed ahead of the US consumer price inflation data on November 15 before the Federal Open Market Committee begins its two-day meeting today.
The Fed is widely expected to raise interest rates again, with the market pricing in a more than 80% probability of a December hike.
China offshore was up 0.17%, Philippines peso 0.16%, Thai baht 0.11%, Japanese yen 0.08%.
However, South Korean won was down 0.33%, Singapore dollar 0.08%, Indonesian rupiah 0.08%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.596, up 0.22% from its previous close of 94.391.
The Bombay Stock Exchange building is seen in Mumbai. The Sensex closed down 281 points to 33,033.56 yesterday.