Markets snap rising streak as financials slide; log weekly losses

Snapping a two-session rising trend, the BSE Sensex tumbled 536 points on Friday as finance and bank stocks skidded after Franklin Templeton MF suddenly closed six debt fund schemes, catching investors off guard.

A depreciating rupee and negative global cues added to the gloom, brokers said.

The 30-share BSE Sensex settled 535.86 points or 1.68 per cent down at 31,327.22, while the NSE Nifty declined 159.50 points, or 1.71 per cent, to 9,154.40.

Franklin Templeton Mutual Fund late on Thursday announced winding up of six debt schemes, with assets under management of over Rs 25,000 crore, due to redemption pressures and lack of liquidity in bond markets amid the COVID-19 crisis.

Many retail investors and high net worth individuals (HNIs) who invested in these schemes as part of their fixed-income asset allocation will be hit as the money will be blocked with no clear timeline for recoveries, experts said.

Bajaj Finance was the top laggard in the Sensex pack, dropping 9.14 per cent, followed by IndusInd Bank (6.58 per cent), Axis Bank (5.96 per cent), ICICI Bank (5.09 per cent) and HDFC (5 per cent).

Reliance Industries, however, capped the losses by rallying 3.34 per cent.

Sun Pharma, Hero MotoCorp, L&T, PowerGrid and Bajaj Auto were among the other gainers.

During the week, the Sensex declined 261.50 points or 0.82 per cent, while Nifty fell 112.35 points or 1.21 per cent.

"...winding up of a few debt schemes by a large fund house in India added to the selling pressure witnessed in Banks and NBFC stocks. Reliance and a few pharma names were the only saving grace in today's trade.

"Investors should have a clear asset allocation strategy to navigate the present volatility created by the pandemic," said S Ranganathan, Head of Research at LKP Securities.

BSE realty, finance, bankex, metal, IT and teck indices fell up to 4.15 per cent, while energy, healthcare and capital goods rose up to 2.05 per cent.

Broader BSE midcap and smallcap indices cracked up to 1.77 per cent.

Meanwhile, global markets slumped on mounting economic pressure of coronavirus-led lockdowns with no respite in sight.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended with heavy losses, while those in Europe were also trading significantly lower in early deals.

Global oil benchmark Brent crude futures slipped 0.38 per cent to USD 21.25 per barrel.

On the currency front, the rupee depreciated 40 paise to provisionally settle at 76.46 against the US dollar.

The death toll due to the pandemic rose to 718 in India, while the number of cases climbed to 23,077.

Global tally of the infections has crossed 27 lakh, with over 1.90 lakh deaths.