MUMBAI: The sensex fell 889 points to close at 57,012 due to strong selling in Reliance and financial stocks. The broader Nifty lost 263 points and closed just below the 17,000 level. The US Fed’s decision to speed up the end of its easy money policy, increase in the Omicron variant infections and rising inflation led to selling across markets, which also affected sentiment on Dalal Street, market players said.
The interest rate hike decision by the Bank of England on Thursday also unnerved investors as they expect more central banks to follow the decision of the UK central bank.
Strong buying in leading technology stocks, however, cushioned the day’s selloff in the sensex with Infosys, HCL Tech and TCS among the five sensex gainers.
Like in the last few weeks, foreign funds led the selling on Friday with a net outflow of Rs 2,070 crore. Foreign portfolio investors (FPIs) have net sold stocks worth Rs 15,640 crore in this month, data from CDSL and BSE showed. This is the biggest monthly net outflow since March 2020.
Friday’s selloff, however, was more severe than in the past few weeks, market players pointed out, which was visible in stocks outside of the sensex also. Compared to the sensex’s 1.5% loss on Friday, BSE’s midcap index closed 2.5% lower, while the smallcap index was down 2.1%. In the broader market, 2,353 stocks on the BSE closed lower compared to 983 that closed higher. According to Emkay Wealth Management research head Joseph Thomas, the main trigger for the fall in indexes was the tightening of liquidity by the US Fed after the last meeting of its policy-setting committee earlier this week and also the central bank’s indication that it would raise interest rates at least three times in 2022. “
The flight of funds, which had reached the shores of emerging markets, as the quantitative easing began with the outbreak of the pandemic, is gradually finding its way back to where it came from, a feature (that was witnessed) with earlier taperings too,” Thomas said in a note. This trend is likely to accelerate further before it could moderate as the excitement relating to the Budget takes over, he said.
The session’s slide also left investors poorer by Rs 4.7 lakh crore with the BSE’s market capitalisation now at Rs 262.2 lakh crore, BSE data showed.
With the US market opening lower and diving deep in the red, dealers here said that the weakness in the domestic market would probably continue.
The interest rate hike decision by the Bank of England on Thursday also unnerved investors as they expect more central banks to follow the decision of the UK central bank.
Strong buying in leading technology stocks, however, cushioned the day’s selloff in the sensex with Infosys, HCL Tech and TCS among the five sensex gainers.
Like in the last few weeks, foreign funds led the selling on Friday with a net outflow of Rs 2,070 crore. Foreign portfolio investors (FPIs) have net sold stocks worth Rs 15,640 crore in this month, data from CDSL and BSE showed. This is the biggest monthly net outflow since March 2020.
Friday’s selloff, however, was more severe than in the past few weeks, market players pointed out, which was visible in stocks outside of the sensex also. Compared to the sensex’s 1.5% loss on Friday, BSE’s midcap index closed 2.5% lower, while the smallcap index was down 2.1%. In the broader market, 2,353 stocks on the BSE closed lower compared to 983 that closed higher. According to Emkay Wealth Management research head Joseph Thomas, the main trigger for the fall in indexes was the tightening of liquidity by the US Fed after the last meeting of its policy-setting committee earlier this week and also the central bank’s indication that it would raise interest rates at least three times in 2022. “
The flight of funds, which had reached the shores of emerging markets, as the quantitative easing began with the outbreak of the pandemic, is gradually finding its way back to where it came from, a feature (that was witnessed) with earlier taperings too,” Thomas said in a note. This trend is likely to accelerate further before it could moderate as the excitement relating to the Budget takes over, he said.
The session’s slide also left investors poorer by Rs 4.7 lakh crore with the BSE’s market capitalisation now at Rs 262.2 lakh crore, BSE data showed.
With the US market opening lower and diving deep in the red, dealers here said that the weakness in the domestic market would probably continue.
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