Shares fell nearly 2% on Friday amid a global sell-off ahead of US inflation data, which will shape the Federal Reserve’s course of action. A widespread sell-off in technology and banking stocks dragged Sensex and Nifty down 1.8% and 1.7% respectively, resulting in the first weekly loss in four weeks. Of the six previous sessions, Nifty has finished in the red in five, mainly following global signals. Investors’ net worth amounting to Rs 3.1 trillion was wiped out on Friday, bringing the cumulative loss over the last six sessions to Rs 7.14 trillion. The combined market capitalization of all listed companies on the BSE was Rs 251.84 trillion as of Friday’s close.
The weakness of the rupee and the surge in the price of crude oil also continued to be major negatives for Indian equities, market observers said. On Friday, the rupee fell 19 paise to close at a new low of 77.93 against the US dollar amid a pullback in equities due to ongoing FPI selling. The local currency has lost 4.5% so far in 2022. The Brent has hardened, trading above $123 a barrel for the past three sessions.
After opening with a gap down, the Sensex finished 1,016.84 points lower at 54,303.44 – with 22 of its constituents finishing in the red. Heavyweight Reliance Industries contributed 258 points to the fall of the Sensex, followed by HDFC (138 points) and Infosys (121 points). The Nifty-50 finished 276.30 points lower at 16,201.80.
The decline in the broader markets was relatively lower than the benchmarks, as the BSE mid-cap and small-cap indices fell 0.6% and 0.7% respectively. All sector indices ended in the red, with Oil & Gas, IT and Financials each falling more than 2%.
“The depreciating rupee, high crude oil prices and consistent FII sales remain major negatives on the domestic front. The market has been stuck in a broader range for the past month, which is expected to continue until clear direction emerges on both sides. As declines are bought in, support at higher levels is lacking,” said Siddhartha Khemka, chief of retail research at Motilal Oswal Financial Services.
Foreign portfolio investors continue their sell-out streak. According to preliminary data available on the exchanges, FPIs sold shares worth Rs 3,973.95 crore on Friday, while domestic institutional investors bought shares worth Rs 2,831.07 crore. According to Bloomberg, FPIs have sold shares worth $2.2 billion so far this month.
Elsewhere in Asia, with the exception of China’s Shanghai Composite, all major indices finished lower, with India being the worst performer. Japan’s Nikkei 225 finished 1.5% lower, while the Hang Seng fell 0.3%.
