After opening the day on a negative note, Indian share markets extended losses as the session progressed and ended deep in the red.
Benchmark indices slumped as all sectors came under pressure.
Indian markets lost Rs 4.8 tn today as markets went into tailspin amid fears of global recession.
Key indices crumbled as heavy selling pressure was seen in energy, finance, telecom, and realty stocks.
At the closing bell, the BSE Sensex stood lower by 1,021 points (down 1.7%).
Meanwhile, the NSE Nifty closed down by 302 points (down 1.7%).
Divi’s Laboratories, Sun Pharma and Tata Steel were among the top gainers today.
Power Grid Corporation, Apollo Hospital, and Hindalco on the other hand, were among the top losers today.
The SGX Nifty was trading at 17,329, down by 311 points, at the time of writing.
The broader markets ended on a negative note. The BSE Midcap was down 2.3% and the BSE SmallCap index ended lower by 1.9%.
All sectors ended on a negative note with stocks in the finance sector, realty sector, telecom sector and energy sector witnessing most of the selling.
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Defensive sectors were also not spared as pharma stocks and FMCG stocks also fell.
Shares of Page Industries, ITC, and Tube Investments of India hit their 52-week highs today.
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Infosys, ICICI Bank, and Tata Steel were amongst the most active shares on the BSE today.
If you’re interested in knowing which shares to trade, read our guide on the best intraday stocks for today.
Outside the home ground, Asian share markets ended on a weak note.
At the close in Tokyo, the Nikkei ended on a negative note, down by 0.6% while the Hang Seng inched lower by 1.2%. The Shanghai Composite ended lower by 0.7%.
US stock futures are trading on a negative note today with Dow futures trading down by 0.9%.
The rupee is trading at 81.01 against the US$.
Gold prices for the latest contract on MCX are trading down by 0.8% at Rs 50,000 per 10 grams.
Meanwhile, silver prices for the latest contract on MCX are trading down by 1.1% at Rs 58,027 per 1 kg.
Gold price is falling for a long time now and the question on everyone’s mind is when will the safe haven get its mojo back.
Here are five reasons why Indian share markets plunged today.
#1 Interest Rate Hike
On Thursday, the US Fed raised interest rates by another 75 basis points and surprised the markets by projecting further sizeable hikes in the coming months. Due to this, India equity market succumbed under pressure.
#2 Weak Global Markets
Weakness in the global markets pushed the Indian benchmark indices lower. While the Dow Jones fell 0.4% and Nasdaq 1.4% overnight, other Asian markets were also under pressure for the third day in a row.
#3 Depreciating Rupee
The rupee has been falling for quite some time now. Today, continuing the trend, rupee depreciated to 81.23 against the dollar hitting a new low, tracking strength of the dollar and a negative trend in domestic equities.
Rupee’s depreciation often leads to discontinuation of FPI buying in India.
#4 FIIs Slow Down
After buying Indian stocks worth over Rs 510 bn last month, the pace of FII inflow has been reducing in September. So far in the month, the FIIs have invested only Rs 108.7 bn through the stock exchange route. On Thursday, they sold Indian equities worth over Rs 25 bn.
#5 RBI Action Next Week
In sync with other central banks, the Reserve Bank of India (RBI) is also expected to hike interest rates by 50 bps in its monetary policy meeting scheduled for next week. This has created nervousness amongst the investors.
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In news from the automobile sector, Mahindra & Mahindra (M&M) was among the top buzzing stocks today.
Mahindra & Mahindra is set to raise up to US$ 500 m for electric vehicle (EV) push.
The Indian auto major is in talks with global investors to raise between US$ 250 m and US$ 500 m to accelerate its plan to build EVs.
Mahindra’s new EV unit for which it is raising the funds was valued at US$9.1 bn in July after its first raise of US$250 m from British International Investment (BII).
Mahindra in his early talks said that it wants a long-term investor to build its EV business.
While Mahindra is not actively looking to raise a higher amount than US$250- US$500 m, it can raise the deal size depending on the terms and valuation.
M&M is one of the most reputed brands in India for automobiles. Its tractors are unbeatable. It is planning to make the most of the opportunity offered by the development of electric vehicles (EVs).
Note that the electric vehicle (EV) megatrend is a once in a century revolution, happening right in front of us.
The revolution has taken the auto sector by storm. All segments of the sector are ripe for disruption and India’s top EV stocks are set to benefit from this shift.
Take a look at the chart below which shows the massive opportunity in the two-wheeler EVs.
Moving on to news from the finance sector, another company of Mahindra group, Mahindra & Mahindra Financial Services was among the top buzzing stocks on Friday.
Shares of M&M Finance tanked 13% after the RBI directed the company to put an immediate stop on loan recoveries or repossession activities via outsourcing agents until further orders.
However, the non-banking finance company may continue to carry out recovery or repossession activities, through its own employees.
This RBI’s action was based on certain material supervisory concerns observed in the said NBFC about the management of its outsourcing activity.
Commenting on it, Mahindra & Mahindra Financial Services said,
- In the normal course of its business, the company repossesses about 4,000 to 5,000 vehicles per month, using third-party agencies and its own employees. We expect this number to go down temporarily by about 3,000-4,000 per month.
And to know what’s moving the Indian stock markets today, check out the most recent share market updates here.
For information on how to pick stocks that have the potential to deliver big returns,
Indian Share Market Update: Top Gainers and Losers
What else is happening in the markets today? Dig in…
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( With inputs from equitymaster)