Indian share markets continued their downtrend throughout the session today and ended deep in the red.
Benchmark indices slipped for the fifth day as investors shunned equities on renewed worries over economic growth in the face of a high-interest rate environment.
Nearly all indices except IT remained in trouble throughout the session with metal, auto, and realty shedding the most.
At the closing bell, the BSE Sensex stood lower by 954 points (down 1.6%).
Meanwhile, the NSE Nifty closed down by 311 points (down 1.8%).
Asian Paints, HCL Technologies, and Infosys were among the top gainers today.
Tata Motors, Hindalco, and Adani Ports on the other hand, were among the top losers today.
The SGX Nifty was trading at 17,027, down by 304 points, at the time of writing.
The broader markets ended on a negative note. The BSE Midcap was down 2.8% and the BSE SmallCap index ended lower by 3.3%.
Barring IT sector, all sectoral indices ended on a negative note with stocks in the metal sector, realty sector, auto sector and power sector witnessing most of the selling.
Defensive sectors were also not spared as pharma stocks and FMCG stocks also fell.
Shares of Westlife Development hit its 52-week highs today.
Power Grid, Reliance, and Bajaj Finance 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.
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At the close in Tokyo, the Nikkei ended on a negative note, down by 2.6% while the Hang Seng inched lower by 0.4%. The Shanghai Composite ended lower by 1.2%.
US stock futures are trading on a negative note today with Dow futures trading down by 0.7%.
The rupee is trading at 81.57 against the US$. The rupee touched a new low against the US dollar today tracking the fall in Indian markets.
Gold prices for the latest contract on MCX are trading up by 0.2% at Rs 49,401 per 10 grams.
Meanwhile, silver prices for the latest contract on MCX are trading down by 0.7% at Rs 56,233 per 1 kg.
Here are five reasons why Indian share markets plunged today.
#1 Interest Rate Hike
Last week, 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 came under intense pressure for the past few sessions.
#2 Weak Global Cues
Weakness in the global markets pushed the Indian benchmark indices lower. While the Dow Jones fell 1.6% and Nasdaq also shed, other Asian markets were 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 81.57 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. In last eight session foreign investors sold US$1 bn of Indian shares. This was the biggest sale by FIIs in recent times.
#5 RBI Action
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 this week. This has created nervousness amongst the investors.
Speaking of stock markets, Rahul Goel talks to Pankaj Tibrewal and discusses his approach to picking stocks, constructing the best portfolio and his focus on management trust, in the latest episode of Investor Hour podcast.
For anyone wanting to become a lot smarter when it comes to the stock markets…and wiser when it comes to understanding the India opportunity, listening to Pankaj is a must.
In news from the defense sector, Hindustan Aeronautics (HAL) was among the top buzzing stocks today.
Hindustan Aeronautics has set up a Rs 2.1 bn Integrated Cryogenic Engine Manufacturing Facility (ICMF) that would cater to the entire rocket engine production under one roof for Indian Space Research Organization (ISRO).
In 2013, HAL signed with a MOU with ISRO to establish the manufacturing facility for cryogenic engine module at HAL’s aerospace division.
The firm in a statement today, informed that the commissioning of all the critical equipment for the manufacturing and assembly requirement has been completed.
Also, the pre-production activities which involve preparation of the process and quality plans, and drawings, has also commenced.
Commenting on it, Hindustan Aeronautic in the filings said,
- The facility (ICMF) will cater to the entire rocket Engine Manufacturing under one roof for ISRO. The facility will boost self-reliance in manufacturing of Hi-thrust rocket engines.
On Tuesday, president Droupadi Murmu will inaugurate the state-of-the-art ICMF, set up over an area of 4,500 square metre housing over 70 hi-tech equipment and testing facilities for manufacturing cryogenic (CE20) and semi-cryogenic (SE2000) engines of Indian rockets.
HAL is among the top defense stocks in India having monopoly in certain segments.
To know more, check out our detailed editorial – HAL: Ready, Set, Fly.
Speaking of the defence sector, note that the government’s Atmanirbhar Bharat Abhiyan has emphasized the need of self-reliance in security space.
Given the increasing focus on self-reliance, the Ministry of Defense (MoD), has set a target of doubling the defense production to US$ 25 bn by 2025. To boost this the Indian government is likely to spend a massive US$130 bn over the next 7-8 years on the modernization of the armed forces.
We believe the defence sector could produce the next set of multibagger stocks over the long run.
Moving on to news from the IPO space, Harsha Engineers made a bumper listing on the bourses today.
Harsha Engineers International clocked gains on listing day today. The stock started off the first day’s trade with whopping 36% premium over issue price despite nervousness in equity markets.
It further climbed 6% as the day progressed to take total gains to 43% over issue price.
Profit booking was seen in early hours due to the volatile markets.
Since IPOs interest you, check out the upcoming IPOs on our website.
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)