Stock Market Plunges for 5th Day: West Asia Conflict, FII Outflows

Mumbai, Oct 4 (PTI) Stock markets slid for the fifth day in a row on Friday with Sensex tumbling 808 points in a topsy-turvy session as FMCG, auto and energy shares succumbed to intense selling and foreign fund outflows triggered by escalating tensions in West Asia.

The BSE Sensex tumbled 808.65 points or 0.98 per cent to settle at a three-week low of 81,688.45. The benchmark hit a low of 81,532.68 and a high of 83,368.32 during the day, reflecting a wild swing of 1,835.64 points.

The NSE Nifty slumped 235.50 points or 0.93 per cent to 25,014.60. Intra-day, it hit a low of 24,966.80 and a high of 25,485.05.

Market investors became poorer by Rs 16.26 lakh crore in five days of heavy correction in equities. The market capitalisation of BSE-listed firms slumped Rs 16,26,691.48 crore to Rs 4,60,89,598.54 crore (USD 5.49 trillion) in five days since Friday last.

On weekly basis, Sensex tanked 3,883.4 points or 4.6 per cent and Nifty by 1,164.35 points or 4.5 per cent in just four sessions, which was their worst week in past two years.

From the 30 Sensex firms, Mahindra & Mahindra, Bajaj Finance, Asian Paints, Nestle, Bharti Airtel, UltraTech Cement, Hindustan Unilever, ITC, and HDFC Bank were the major laggards.

In contrast, Infosys, Tech Mahindra, Tata Motors, Axis Bank, Tata Consultancy Services and State Bank of India were among the gainers.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 15,243.27 crore on Thursday, according to exchange data.

"Nifty ended lower for the fifth consecutive session on Friday. It recorded its worst week in over two years amid rising tensions in the Middle East," said Deepak Jasani, Head of Retail Research, HDFC Securities.

Vinod Nair, Head of Research, Geojit Financial Services said, "The bearish sentiment continued as investors are monitoring the escalating conflict in the Middle East and have adopted a sell-on recovery strategy."

The pessimism on the market is expected to continue in the near term amidst rising crude prices and fund flows to cheaper markets like China, he added.

The BSE midcap gauge declined 0.94 per cent and smallcap index went lower by 0.80 per cent.

Among the indices, realty fell the most by 1.60 per cent. Auto (1.50 per cent), telecommunication (1.25 per cent), utilities (1.20 per cent), consumer discretionary (1.18 per cent) and commodities (1.14 per cent) were among losers.

IT emerged as the only gainer.

A total of 2,387 stocks declined while 1,563 advanced and 104 remained unchanged.

"The increase in geopolitical tensions between Israel and Iran weighed on risk assets. In global news, mounting geopolitical tensions have contributed to a shaky start in October for the stock market," Shrikant Chouhan, Head of Equity Research, Kotak Securities, said.

In Asian markets, Seoul, Tokyo and Hong Kong settled in the positive territory. Markets in mainland China are closed due to a holiday.

European markets were trading higher in mid-session deals. The US markets ended lower on Thursday.

"The last three days have witnessed huge FII selling of Rs 30,614 crore in the cash market. FIIs are moving money from expensive India to cheap Hong Kong on expectations that the monetary, and fiscal stimulus being implemented by the Chinese authorities will stimulate the Chinese economy and improve the earnings of Chinese companies.

"It remains to be seen how this Chinese recovery hopes to play out," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Global oil benchmark Brent crude climbed 0.99 per cent to USD 78.39 a barrel.

Falling for the fourth straight session on Thursday, the BSE benchmark Sensex tumbled 1,769.19 points or 2.10 per cent. The Nifty slumped 546.80 points or 2.12 per cent.