Despite having a strong start to the day, with Sensex rises by 130 points and Nifty standing high at 11,600 marks in the opening trade this week, the market falls down at the end of the day with BSE Sensex closing 1.44 per cent or 560.45 points lower at 38,337.01 and NSE Nifty at 11,419.25, down 177.65 points or 1.53 per cent to log the 2nd biggest fall of 2019 so far. The broader markets also traded in line with benchmarks as the Nifty Midcap cracked 2.15 percent and Smallcap index declined 1.8 percent.
Most sectoral indices ended in red, losing 1-5 percent. Nifty Bank lost 660 points. Four stocks ended in the green and twenty-six in the red among the 30-pack Sensex. NTPC emerged as the best performer of the day and M&M as the worst. IndusInd Bank, SBI, HDFC, Bajaj Finance, Hero MotoCorp, and YES Bank too joined the losers list, slipping up to 5 percent. On the other hand, TCS, ONGC, and POWEWRGRID showed growth.
According to Vinod Nair, Head of Research, Geojit Financial Services, risk sentiment was impacted by the GoI’s reluctance to tweak FPI’s income tax surcharge and the deficiency in the monsoon rain. He also stated that the fact that ADB lowered India’s growth forecast for this year to 7 percent and lackluster earnings from domestic corporates added anxiety over premium valuation.
John Williams, vice chairman of the Fed’s rate-setting committee, made a case for an aggressive interest rate cut. He said when rates and inflation are low, policymakers cannot afford to keep their powder dry and wait for potential economic problems to materialize. Moving on to the news from the macroeconomic space, Finance Minister Nirmala Sitharaman announced that foreign portfolio investors (FPIs) should consider the option of structuring themselves as companies rather than trusts to avoid paying the increased surcharge announced in Budget 2019.