Domestic indies magnify losses; Nifty drops over 700 points

Domestic equity markets magnified their losses and were trading with cut of around three percent, which dragged both the Sensex and Nifty below their psychological 78,600 and 24,050 levels respectively. Meanwhile, the broader markets were also facing the heat of selling; the BSE mid-cap index declined by 3.99 per cent and the small-cap index was down 4.42 per cent. Hectic selling in Infosys, SBI, Tata Motors and Tata Steel companies' stocks dragged the markets lower. Weak cues from the global markets weighed on the domestic sentiments. Traders remained cautious as weak US jobs data indicated the economy could be headed for a recession. Meanwhile, investors across the globe are also observing the evolving situation in the Middle East. Tensions are escalating in the Middle East following the assassination of Hamas leader Ismail Haniyeh in Tehran allegedly by Israel. Besides, the crash in Indian stock market pushed the India VIX index higher by 50.42%. The index, which closed at 14.32 on Friday surged to 22.90 level. Indian VIX is a gauge of measuring volatility in the stock market. 

On the global front, Asian markets were trading in deeply in red  with the Nikkei 225 dropping over 12% following negative cues from the US markets. Back home, all the sectoral indices on the BSE were trading in red led by Metal, Realty, PSU, Oil & Gas and IT. 

Meanwhile, the BSE Sensex is currently trading at 78519.26, down by 2462.69 points or 3.04% after trading in a range of 78295.86 and 79780.61. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 3.99%, while Small cap index down by 4.42%.

The ltop osing sectoral indices on the BSE were Metal down by 5.14%, Realty down by 4.78%, PSU down by 4.76%, Oil & Gas down by 4.51% and IT down by 4.49%, while there were no gainers.  

The few top gainers on the Sensex were Hindustan Unilever up by 0.84%, Nestle up by 0.50% and Sun Pharma up by 0.15%. On the flip side, Tata Motors down by 6.48%, Tata Steel down by 5.28%, Tech Mahindra down by 5.13%, SBI down by 5.04% and Infosys down by 4.96% were the top losers.

Meanwhile, Microfinance Industry Network (MFIN), the self-regulatory organisation of the micro-credit sector, has said that the entities operating in this space have demonstrated maturity with several of them lowering interest rates in the last few months. It said the reduction in interest rates has been up to 150 basis points and this downward revision had been done when the cost of funds remained elevated for the entities.

MFIN said the microfinance units had been able to pass on efficiency gains to their customers, which had been made possible by the adoption of better technology and diversifying sources of funding. Review of the portfolio and interest rates by microlenders is an ongoing process, it said the sector is committed to passing on the gains to the customers.

The self-regulatory organisation said assessment of a borrower’s household income is important as this will ensure that a borrower does not overstretch herself and is able to honour her repayments on time. MFIN members also identified several guardrails like restricting the number of microfinance lenders to a borrower to a maximum of four and limiting the total indebtedness to Rs 2 lakh. 

The CNX Nifty is currently trading at 24006.50, down by 711.20 points or 2.88% after trading in a range of 23893.70 and 24350.05. There were 3 stocks advancing against 47 stocks declining on the index.

The few top gainers on Nifty were Hindustan Unilever up by 0.75%, Tata Consumer up by 0.21% and Nestle up by 0.12%. On the flip side, Tata Motors down by 6.81%, Shriram Finance down by 5.95%, Tata Steel down by 5.70%, ONGC down by 5.51% and Tech Mahindra down by 5.15% were the top losers.

All Asian markets were trading lower; Hang Seng declined 307.19 points or 1.81% to 16,638.32, Jakarta Composite plunged 145.52 points or 2.03% to 7,162.60, Shanghai Composite weakened 28.06 points or 0.97% to 2,877.28, Straits Times fell 143.88 points or 4.25% to 3,237.57, KOSPI dropped 264.54 points or 9.88% to 2,411.65, Nikkei 225 slipped 4593.12 points or 12.79% to 31,316.58 and Taiwan Weighted lost 1823.02 points or 8.43% to 19,815.07.