Sensex down 156 points as US election worries spook investors

Mumbai: Spooked investors remained hesitant for the fifth session in a row amid uncertainty over US election result, pulling Sensex 156 points to near four-month low of 27,274.15 led by huge sell-off in pharma counters.

For the week, the first of the new Samvat Year 2073, the Sensex and Nifty both recorded losses by plunging 667.36 points, or 2.38%, and 204.25 points, or 0.36%, respectively.

The relentless losses in stocks continued amid sustained selling by foreign funds and retail investors, tracking global cues dominated by fear that market favourite Hillary Clinton is lagging behind Donald Trump in the US presidential race.

Investors could not find any solace even after the finalisation of tax structure by the GST council as markets continued to ferry in the negative zone.

Moreover, domestic market woes piled up as the session saw pharma stocks tumbling following reports of a likely US probe against Indian pharma companies making generic drugs.

Reacting to the news, Sunpharma shares tumbled 7.45%, followed by Dr Reddy 5.67%, Lupin 3.57% and Cipla 2.60%.

Vinod Nair, head of research, Geojit BNP Paribas Financial Services Ltd, said, “Market tumbled as investors are concerned over the final lap of US political battle and higher tax burden from GST. Even though GST is one step closer, white goods were impacted on fears of a higher tax burden than expected earlier. Pharma companies are the major casualty due to the price collusion in US market. The rising volatility led the investors to wait and watch for a favorable risk reward.”

The Sensex, which had lost 511.23 points in the previous four sessions, dropped by another 156.13 points, or 0.57%, to end at 27,274.15, its lowest closing since July 8. It shuttled between 27,498.91 and 27,193.61.

The 30-share index hit the day’s lowest at 27,193.61. The NSE Nifty shed 51.20 points, or 0.60%, to end at 8,433.75, after moving between 8,504 and 8,400.25.

The broader markets too remained under pressure as investors indulged in cutting down their bets with the small-cap index falling by 2.20% and the mid-cap index shedding 1.34%.

Bucking the overall trend, shares of consumer goods companies turned buyers’ fancy on hopes that lower tax rates would be applied after a four-tier GST tax structure of 5, 12, 18 and 28% decided by a high-powered council on Thursday.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 706.77 crore on Thursday, as per provisional data.

Globally, in the Asian region, Japan’s Nikkei fell 1.34%, Shanghai Composite fell 0.12%, while Hong Kong’s Hang Seng down 0.18%. European markets too were under pressure with Frankfurt’s DAx 30 lost 0.4% and the Paris CAC shed 0.2% in their initial deals. London FTSE dipped 0.7%.