Mumbai. The trend of decline in local stock markets continued on Wednesday and BSE Sensex plunged by 984 points and closed at the lowest level in four months. NSE Nifty also fell by more than one percent. Stock markets fell due to heavy selling in banking, auto and capital goods stocks amid retail inflation hitting a 14-month high in October and continued foreign capital outflows.
BSE Sensex closed at 77,690.95 with a plunge of 984.23 points or 1.25 percent. At one time during trading it had fallen to 1,141.88 points. There was a decline in the Nifty of the National Stock Exchange in the fifth trading session and it fell by 324.40 points or 1.36 percent and closed at 23,559.05 points.
Among the 30 Sensex stocks, Mahindra & Mahindra, Tata Steel, Adani Ports, JSW Steel, IndusInd Bank, Reliance Industries, HDFC Bank and Kotak Mahindra Bank were the biggest losers. On the other hand, shares of Tata Motors, NTPC, Hindustan Unilever, Asian Paint and Infosys were in profit.
Vinod Nair, head of research at Geojit Financial Services, said investor sentiment has been affected by continuous selling by foreign institutional investors (FIIs) amid weak quarterly results of small companies and domestic inflation reaching a 14-month high. This has dimmed the hopes of the Reserve Bank of India cutting interest rates in the near future. Data released on Tuesday shows that retail inflation has crossed the Reserve Bank’s upper satisfactory level (six percent). Retail inflation rose to a 14-month high of 6.21 percent in October, mainly due to rising food prices. According to stock market data, foreign institutional investors (FIIs) sold shares worth Rs 3,024.31 crore on Tuesday.
Shares of medium and small companies were most affected, while financial and automobile segments also witnessed considerable weakness. BSE Smallcap index fell by 3.08 percent and Midcap index fell by 2.56 percent. In other markets of Asia, South Korea’s Kospi, Japan’s Nikkei and Hong Kong’s Hang Seng were in loss, while China’s Shanghai Composite was in gain.
There was a brisk afternoon trading in European markets. US markets were in loss on Tuesday. Global oil standard Brent crude stood at $ 72.56 per barrel with a gain of 0.93 percent. BSE Sensex fell by 820.97 points on Tuesday while Nifty fell by 257.85 points.