Sensex falls 130 points on global sell-off amid fiscal deficit worries

New Delhi: The BSE Sensex dropped by over 137 points, or 0.40% to close at 34,046.94 on Thursday to extend losses for the third day in a row as fiscal deficit worries and global sell-off triggered by US Fed rate hike fears continued to unsettle investors despite positive macro data.

Banking stocks, particularly state-run lenders were among the biggest laggards on unabated nervous off-loading by participants amid growing concerns over a spate of fraud cases.

Select auto stocks, however, were in some demand on the back of encouraging February sales numbers.

The 30-share benchmark opened higher and scaled a high of 34,278.63 in early deals after positive GDP data for the third quarter. According to the official data released after market hours yesterday, the GDP growth rate rose to a five-quarter high growth of 7.2% in the October-December quarter on good showing by key sectors like manufacturing.

The core sector growth rate also picked up momentum to touch 6.2% in January.

Stocks, however, slipped into the negative zone with the BSE Sensex touching a low of 34,015.79 due to continued selling in global markets.

The 30-share barometer settled at 34,046.94, down 137.10 points, or 0.40% as its 20 constituents led by ICICI Bank, and SBI ended in the red.

The broader NSE Nifty 50 too lost 34.50 points, or 0.33% at 10,458.35 after shuttling between 10,525.50 and 10,447.15.

For the week, the flagship BSE Sensex recorded a fall of 95.21 points, or 0.27%, while the NSE Nifty lost 32.70 points, or 0.31%.

“Markets traded dull and ended lower amid mixed local cues. Initially, participants took note of encouraging GDP figure and uptick in core sector data, which helped index to open higher despite weak global markets. However, further widening of fiscal deficit also dampened the sentiment to some extent and capped upside,” said Jayant Manglik, President, Religare Broking Ltd.

Official data showed that fiscal deficit touched Rs 6.77 lakh crore at the end of January, 113.7% of the target for the entire fiscal, on account of higher expenditure.

Analyst said the market was in “sell on rise” phase as investors preferred to book profits amid global uncertainty.

Asian markets broadly closed with losses, extending a global sell-off on US interest rate hike fears. US Fed chief Jerome Powell who painted a rosy picture about the US economy and hinted at future rate hikes before the Congress was set to speak on Capitol Hill again today.

In the sectoral terms, the BSE metal index fell by 0.95%, bankex (0.85%), realty (0.77%), consumer durables (0.71%), teck (0.65%), healthcare (0.58%), IT (0.53%), power (0.48%) and PSU (0.43%).

In the Sensex pack, ICICI Bank suffered the most by 2.63%, followed by country’s largest state-run SBI 2.31%.

Other laggards include Infosys, Power Grid, HDFC Bank, ITC Ltd, Axis Bank, RIL, Hero MotoCorp, Yes Bank, L&T, Dr Reddy’s, Adani Ports, Sun Pharma, NTPC, TCS an HDFC Ltd, falling up to 1.19%.

In contrast, Coal India, IndusInd Bank, Hindustan Unilever, M&M, Kotak Bank, ONGC, Tata Steel, Tata Motors and Maruti Suzui managed to end in the positive terrain and cushioned the fall.

The broader markets too were under selling pressure from investors with the BSE mid-cap index falling by 0.61%, while small-cap index lost 0.24%.

Globally, Japan’s Nikkei fell 1.56%, while Singapore shed 0.24%. Shanghai Composite Index, however, was up 0.44% and Hong Kong’s Hang Seng rose 0.65%.

In Europe, Frankfurt’s DAX 30 fell 0.50%, while Paris CAC 40 down 0.25% in their early deals. London’s FTSE too fell 0.18%.