A security guard searches a man near a bronze bull statue at the entrance to the Bombay Stock Exchange. The benchmark BSE index yesterday fell 173.47 points to end at 20,946.65, marking its biggest single-day fall since February 20.
Reuters/Mumbai
The BSE Sensex fell yesterday to snap a five-day winning streak as blue-chip stocks including ICICI Bank declined as part of an emerging markets retreat over fears of military tensions between Russia and Ukraine.
The rising threat of war between Ukraine and Russia spooked markets and sent investors scurrying for relative safety, pushing global stocks down sharply and lifting gold to a four-month high.
Sentiment also soured after data late on Friday showed the economy grew a below-than-expected 4.7% in the October-December quarter, while data released on Saturday showed activity in China’s factory sector hit an eight-month low in February.
Any resurgence of global risk aversion could threaten the recent strong buying in Indian shares, which has been based on increased confidence in the country’s effort to stabilise the currency and reduce its current account deficit. NSE’s volatility index advanced 7.8%, its biggest single day gain since January 27.
“Currently there is no change in the positive view. If a war breaks out, crude could surge higher, troubling India to that extent,” said Jyotheesh Kumar, executive vice president of HDFC Securities.
The benchmark BSE index fell 0.82%, or 173.47 points, to end at 20,946.65, marking its biggest single-day fall since February 20.
Nifty lost 0.88%, or 55.50 points, to end at 6,221.45, snapping a five-day winning streak that saw the index gain 3.1%.
Overseas investors have been buyers of Indian shares in each of the previous 11 sessions, totalling a net $733.5mn, while domestic mutual funds and insurance companies turned net buyers on Friday, for the first time since February 12.
ICICI Bank fell 1.4%, while HCL Technologies slumped 4.5%.
Among other blue-chip stocks, Tata Motors fell 1.5% after marking its record high of Rs418.20 on Friday, while Tata Consultancy Services lost 1.6%.
Jaiprakash Power Ventures slumped 15.4% on worries the power company had sold two hydroelectric power plants to a consortium led by Abu Dhabi National Energy Co for less than expected.
Shares of its parent company, Jaiprakash Associates, also lost 3.3%.
Lupin fell 1.3% on profit-taking after marking an all-time high of Rs1,002.40 on Friday.
Sun Pharmaceutical Industries fell 3% after Bank of America Merrill Lynch downgraded the stock to “neutral” from “buy”, saying some of its key drugs will face tough competition.
However, Astrazeneca Pharma India surged 20% to its maximum daily limit after the drug maker said its board would meet on Wednesday to discuss a delisting proposal.
Voltas also rose 1.4% after the maker of air conditioners and cooling products said on Friday it had formed a joint venture with the Singapore unit of Dow Chemical Co for water and waste water treatment.
Meanwhile, India’s rupee fell the most in two weeks on concern capital inflows will slow after a report showed Asia’s third-largest economy cooled.
Gross domestic product rose 4.7% in the three months ended December 31 from a year earlier, following a 4.8% gain the previous quarter, government data showed after markets shut on February 28. An official estimate for a 4.9% expansion in the year ending March 31, compared with a decade-low 4.5% in the prior 12 months, now appears “challenging,” according to Citigroup. Ten-year bonds dropped, adding to last month’s biggest decline since November.
The rupee weakened 0.5%, the most since February 18, to 62.0425 per dollar in Mumbai, prices from local banks compiled by Bloomberg show. It gained 1.5% last month. The yield on the 8.83% sovereign notes due November 2023 rose four basis points to 8.90%. It climbed nine basis points in February as Reserve Bank of India Governor Raghuram Rajan said inflation remains the biggest threat to the economy.
Growth in the fourth quarter would need to rise by 5.7% to meet the government’s annual estimate.