Mumbai: BSE Sensex on Friday tanked nearly 699 points, its biggest one-day fall in 9 months, to close at a four-month low of 26,819 and Nifty went below the 8,300-mark on concerns that Donald Trump's impending reforms may spark outflows from emerging markets.
The overnight recovery was short-lived as domestic investors surrendered yesterday's gains digesting the Center's move to demonetize the higher value notes coupled with a slew of other negative factors like lower Asian stocks and increase in US bond yields.
Investors appeared to be cautious on fears that US president-elect Trump's planned huge spending policies would be inflationary that may lead to US interest rate hike and dent the appeal of emerging markets.
Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services Ltd, said, "As euphoria surrounding the US election settled, prospects of outflows from emerging markets to the US, anticipating reform measures from Trump, and rise in US treasury yields has resulted in sharp sell-off in Asian markets. The anticipated rise in spending in the US has also upped the ante for FOMC rate hike in December."
Besides, profit-booking ahead of long weekend also exaggerated the fall in Indian markets. Banks resisted for most part of the day, before giving in after SBI announced Q2 results, he added.
Besides, the rupee breaching the 67-mark against the US dollar by plunging 59 paise to 67.22 (intra-day) at the forex market too had its bearing on the trading sentiment.
Investors concern was further besieged by weak quarterly earnings in index heavy-weights and other sector specific developments.
Weak earnings from country's largest lender SBI and other bluechip companies added to the selling pressure.
SBI today reported a massive 99.6 percent dip in consolidated net profit at Rs 20.7 crore for the September quarter. Reacting to the numbers, the lender's shares slumped 3.09 percent.
The Sensex opened gap-down at 27,344.85 and drifted lower to 26,777.18 before closing at 26,818.82, showing a fall of 698.86 points, or 2.54 percent. This was the lowest closing level for the benchmark index as it had ended at 26,999.72 on June 30 this year. Also, today's Sensex fall was the worst single-day plunge in nine months as it had slumped 807.07 points on February 11 this year.
The Nifty also dropped 229.45 points, or 2.69 percent, to end at over four-month low of 8,296.30 after trading between 8,460.60 and 8,284.95. It had finished at 8,287.75 on June 30 this year.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 733.49 crore yesterday, as per provisional data.
Overseas, Asian markets ended lower as US bond yields soared. European shares were also lower with indices in UK and France were down in their early deals.
Back home, the broad market depicted weakness. There were more than four losers against every gainer on BSE. As many as 2,198 shares fell and 489 rose. A total of 143 shares remained unchanged.
The BSE Mid-Cap index provisionally fell 3.62 percent. The BSE Small-Cap index provisionally fell 3.42 percent. The decline in both these indices was higher than the Sensex's decline in percentage terms.
Out of the 30-share Sensex pack, 29 scrips ended lower while only one closed higher.
Mahindra & Mahindra (M&M) took the biggest hit as it plunged by 6.02 percent to Rs 1,244 after the company said it will participate in the proposed rights issue of Mahindra Lifespace Developers.
It was followed by Adani Ports 5.86 percent, ICICI Bank 5.32 pct, Hero Motoco 5.18 pct, Asian Paints 5.02 pct, Tata Motors 5.01 pct, HDFC 4.55 pct, Maruti 3.54 pct, Bajaj Auto 3.19 pct, ITC 3.11 pct, SBI 3.09 pct and Cipla 3.06 pct.
From the gainers pack only shares of Sun Pharmaceutical Industries today surged over 3.30 percent on the bourses after the drug major posted a two-fold jump in second quarter net profit.
Among BSE sectoral and industry indices, Auto fell by 4.53 percent followed by Consumer Durables 4.19 pct, Realty 4 pct, Telecom 3.40 pct, FMCG 3.24 pct, Finance 3.05 pct, Industrials 3.03 pct, Utilities 2.52 pct, Bankex 2.51 pct and Teck 2.48 pct.
The market breadth turned negative as 2,223 stocks ended lower, 460 closed higher while 147 ruled steady.
The total turnover on BSE amounted to Rs 3,461.19 crore, lower than turnover of Rs 3,737.42 crore registered during the previous trading session.
Both the exchanges will be closed on Monday, November 14 on account of Gurunanak Jayanti.
(With agency inputs)