Stock markets nosedive on profit-booking, foreign fund outflows

Mumbai, Dec 8 (PTI) Equity benchmark indices Sensex and Nifty nosedived on Monday after two consecutive days of gains, as investors rushed to take profits amid the unabated selling of stocks by foreign investors.

Analysts said investors turned defensive ahead of this week's US Federal Reserve policy decision, which further weakened the sentiment.

The 30-share BSE Sensex plunged by 609.68 points, or 0.71 per cent, to close at 85,102.69. During the day, it plummeted by 836.78 points, or 0.97 per cent, to hit the intraday low of 84,875.59.

Snapping a two-day gaining streak, the 50-share NSE Nifty declined by 225.90 points, or 0.86 per cent, to settle at 25,960.55. In the intraday session, it dropped 294.2 points, or 1.12 per cent, to hit a low of 25,892.25.

Among the Sensex constituents, Bharat Electronics Ltd, Eternal, Trent, Tata Steel, Bajaj Finance, Adani Ports, Bajaj Finserv, State Bank of India, PowerGrid, Asian Paints, Tata Motors Passenger Vehicles, Titan, NTPC, Kotak Mahindra Bank, Larsen & Toubro and Bharti Airtel were among the laggards.

Tech Mahindra, HCL Technologies, Reliance Industries and HDFC Bank were the only gainers.

"The market experienced a broad-based decline, slipping below the 26,000-mark as investors turned cautious ahead of this week's Fed policy decision," Vinod Nair, Head of Research, Geojit Investments Ltd, said.

He added that despite robust domestic growth figures and the RBI's recent rate cut, short-term sentiment remains overshadowed by global monetary policy concerns, persistent FII outflows, and currency depreciation.

"Volatility was further amplified by a surge in Japanese bond yields to multi-year highs, sparking fears of a potential unwinding of the yen carry trade, Nair said.

The BSE midcap gauge declined 1.73 per cent, while smallcap index dropped 2.20 per cent.

Among sectoral indices, Services tumbled by 3.70 per cent, Realty by 3.50 per cent, Capital Goods by 2.83 per cent, Telecommunication by 2.53 per cent, Industrials by 2.21 per cent, Utilities by 2.10 per cent, Metal by 1.96 per cent, and Power by 1.84 per cent.

As many as 3,348 stocks declined, while 950 advanced and 187 remain unchanged on the BSE.

"Indian equities declined on Monday, with the Nifty slipping a little over 1 per cent to 25,897 and the Sensex falling nearly 800 points. The pullback was led by profit-taking in small- and midcap stocks, along with selling pressure in select index heavyweights.

"Market breadth remained weak, and FII outflows continued, while investors stayed cautious ahead of Wednesday's US Federal Reserve policy announcement," Gaurav Garg, Research Analyst Lemonn Markets Desk, said.

Garg attributed the weakness to elevated valuations, unwinding of leveraged positions, and global risk-off sentiment.

The rupee depreciated to 90.11 against the US dollar, while higher crude prices and a rise in the India VIX also weighed on sentiment.

"Persistent FII selling, influenced by uncertainty around the global rate-cut trajectory and soft cues from Asian markets, remained a key factor for domestic equities," he said.

Shares of InterGlobe Aviation, the parent company of IndiGo, declined by nearly 9 per cent to close at Rs 4,926.55 apiece on the BSE as the disruptions in the crisis-hit airline's flight operations entered the seventh day.

During the day, the scrip of Gurugram-based company slumped by 9.85 per cent.

IndiGo which has been facing heat from both the government and the passengers for cancelling hundreds of flights since December 2, citing regulatory changes in the pilots' new flight duty and regulations norms, which resulted in lakhs of passengers getting stuck at airports pan-India.

Meanwhile, aviation minister K Rammohan Naidu said in the Rajya Sabha on Monday that the government has initiated an inquiry into Indigo's mass flight cancellations and will take strict action against the operator to set an example for other airlines.

Blaming the airlines for its failure to manage the crew and duty roster through its day-to-day operations, Naidu said, "We are not taking this situation easily. We are doing an inquiry. We will take very, very strict action not only for this situation but also as an example." Other Asian markets largely closed on a positive note, with South Korea's KOSPI rising 1.34 per cent, Shanghai's SSE Composite index climbing by 0.54 per cent, and Japan's Nikkei 225 benchmark increasing by 0.13 per cent, while Hong Kong's Hang Seng index fell 1.23 per cent.

The European markets were trading on a mixed note. Wall Street ended higher on Friday.

Meanwhile, foreign institutional investors (FIIs) offloaded equities worth Rs 438.90 crore on Friday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 4,189.17 crore, according to exchange data.

Brent crude, the global oil benchmark, fell 0.61 per cent to USD 63.37 per barrel.

On Friday, the 30-share BSE Sensex benchmark advanced 447.05 points to settle at 85,712.37, while the 50-share NSE Nifty climbed 152.70 points to close at 26,186.45. PTI HG HVA