Sensex falls 330 points on weak global cues

Indian shares fell one per cent following losses in European indices and fresh concerns over global economic growth and a fall in oil prices.

On Monday, Indian markets started on a benign note and continued to trade flat for most of the day before succumbing to selling pressure in the last 45 minutes of trade. The BSE Sensex slid 329.5 points, or 1.3 per cent, to close at 24,287, while the 50-share Nifty ended down 102 points, or 1.4 per cent, to 7,387.

“The continuous fall in oil prices and the slowdown in China are hitting global markets and India. European markets have reacted negatively to disinflation concerns. Lack of domestic triggers and low expectations from the Union Budget will overhang domestic performance,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services.

Tata Consultancy Services and Infosys, India’s largest software exporters, slid two per cent on Monday. ITC, the largest cigarette company in India, retreated the most in a month, while Hindustan Unilever ended a three-day 5.6 per cent gain. Tata Motors, owner of Jaguar Land Rover, was the worst performer on the S&P BSE Sensex, down almost four per cent.

Foreign funds have pulled out $1.7 billion from Indian stocks since January 1, dragging the Sensex down seven per cent and making the rupee Asia’s worst-performing currency this year.

They bought $3.3 billion worth of shares last year, the smallest inflow since 2011, according to data compiled by Bloomberg. Most Asian markets remained closed on Monday on account of the Lunar New Year holiday. European stocks traded lower for a sixth day on Monday, with the cost of protecting European banks’ and insurers’ senior debt being on its worst run since March 2013 and yields on Germany’s 10-year Bunds the lowest since April. The FTSE, DAX, and CAC were trading lower between 1.8 and 2.6 per cent as of 6:15 pm India time. The US markets had slid on Friday, led by a sharp decline in technology shares, with the Dow Jones falling 1.3 per cent and the Nasdaq Composite index slipping 3.2 per cent.

The US economy added fewer-than-expected jobs in January, but the jobless rate hit an eight-year low, indicating a recovery in the labour market.

Back home, investors are awaiting fiscal third-quarter earnings from some of India’s biggest companies including Tata Motors and State Bank of India this week. So far, 10 out of 18 Sensex firms have posted earnings for the December 2015 quarter that have beaten estimates. Fifty-seven per cent of companies in the September 2015 quarter posted earnings that matched or beat estimates, versus 60 per cent in June, data compiled by Bloomberg showed.

The Sensex trades at 14.9 times its projected 12-month earnings, near the cheapest since September, versus a multiple of 10.8 for the MSCI Emerging Markets Index.