Fund outflows, IT stocks hit markets
Dragged down by foreign fund outflows and fall in IT stocks, markets continued their downward journey for the second down in a row with benchmark BSE Sensex shedding 266.44 points to close at 24,020.98. Nifty was also down by 89 points, cracking below 7,300 level.
Sensex sheds 266 points; Nifty down by 89 points
Mumbai: Dragged down by foreign fund outflows and fall in IT stocks, markets continued their downward journey for the second down in a row with benchmark BSE Sensex shedding 266.44 points to close at 24,020.98. Nifty was also down by 89 points, cracking below 7,300 level.
Disappointing corporate earnings and fears of a global slowdown forced investors to dump risky assets and move to safe haven options. Even good GDP growth forecast made by the government for the current fiscal did not lift the mood.
While releasing the GDP numbers for the third quarter on Monday, the government had said that Indian economy will grow at a 5-year high of 7.6 per cent in the fiscal ending March, overtaking a slowing China.
The benchmark BSE Sensex resumed lower at 24,076.85 and dropped further to 23,919.47 before ending at 24,020.98 - the lowest closing since January 21 - showing a loss of 266.44 points or 1.10 per cent.
The NSE 50-share Nifty also dropped by 89.05 points or 1.21 per cent below the key 7,300-level to 7,298.20. Shares of drug maker Dr Reddy's fell by nearly 4 per cent after the company's third quarter earnings failed to meet market expectations.
It posted a marginal rise in net profit at Rs 579.2 crore for the quarter ended December 31, hit by weak sales in emerging markets like Russia and CIS nations. Punjab National Bank plunged by nearly 7 per cent after reporting a whopping 93.41 per cent decline in profit for the third quarter.
IT stocks came under heavy selling pressure, falling by up to 5 per cent, after Cognizant gave a lower revenue guidance for 2016. Shares of Tech Mahindra fell by 4.89 per cent and HCL Technologies was down 4.52 per cent on BSE.
Among others, TCS went down by 3.68 per cent, Infosys lost 3.46 per cent and Wipro fell by 1.72 per cent. Overseas, Japanese shares fell sharply, joining overnight sell-off in US. Europe was also lower with key indexes in France, Germany and the UK down by up to 1 per cent.