Sensex Slumps Over 1,000 Points In 4 Days, Rupee Weakens To 2-Week Low

The recent selloff has wiped nearly 1,000 points off Sensex in just four days.

Sensex Slumps Over 1,000 Points In 4 Days, Rupee Weakens To 2-Week Low

Weak global markets and high valuations have weighed on Sensex.

Story Highlights
  • Sensex fell over 300 points on Friday Morning
  • Weak global markets, earnings disappointments weigh on markets
  • The rupee also came under pressure, falling to two-week low
Indian stocks markets witnessed strong selling pressure on Friday, with the Sensex falling over 300 points. The Nifty also slumped to near 9,700 at day's low. The recent selloff has wiped over 1,000 points off Sensex in just four days. Weak global markets, some earnings disappointment and profit-taking weighed on the Indian markets. The rupee has also come under pressure, falling to two-week low of 64.27 against the US dollar. The rupee had closed at 64.08 against the dollar on Thursday.

10 Things To know about Sensex, Nifty selloff:

1) Analysts said Indian markets were vulnerable to a selloff after the strong rally this year which drove Sensex and Nifty to record highs. Despite the recent correction, the Sensex is up over 17 per cent year to date.


2) Meanwhile, Asian equity markets extended a global slide on Friday as tensions ramped up between the United States and North Korea, sending investors fleeing to less risky assets such the yen, the Swiss franc and US Treasuries.

3) Overnight, Wall Street closed sharply lower after US President Donald Trump issued a new round of fiery rhetoric, warning Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory. MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.4 per cent in its third session of declines to a near one-month low, heading for a 2.1 per cent drop for the week.

4) "What has changed this time is that the scary threats and war of words between the U.S. and North Korea have intensified to the point that markets can't ignore it," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "Of course it's all come at a time when share markets are due for a correction so North Korea has provided a perfect trigger."

5) Back to the domestic markets, the NSE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, rose 8 per cent to its highest level in over 6 months, reflecting the jitteriness among investors.

6) Rahul Shah, VP- equity advisory at Motilal Oswal Securities, said, "Indian markets took a breather after a long three months. This was in sync with the global markets. The main reason for the selloff was couple of things - geo-political tensions and weak quarterly performance reported in last few days." He remains positive on Indian markets, saying "good monsoon , improving macroeconomics and GST all augurs well for the market".

7) Sameet Chavan, chief analyst at Angel Broking, advised caution in the near term, saying that domestic markets are likely to remain under pressure and any intra-day bounceback could be sold into. "Traders are advised to remain light and avoid taking undue risks as individual stocks may continue correcting in next few days," he said.

8) The selling pressure in the Indian markets were broad-based today will the sectoral indices on the BSE trading in the red. Banking, metal, capital goods stocks led the fall.

9) Among the Nifty50 stocks, Tata Motors, Vedanta, L&T, Cipla, and ONGC were down around 2 per cent. Tata Motors shares had slumped over 8 per cent on Thursday over its Q1 earnings.

10) BSE midcap and smallcap indices falling over 1.3 per cent and 1.7 per cent respectively. At 10:04 am, the Sensex was down 213 points at 31,319 while Nifty traded 73 points lower at 9,747.
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