Markets tank on macro risks; oil spurt sinks energy stocks

The Sensex plunged 273 points while the NSE Nifty finished below the 10,700-mark today as firming crude oil prices and a weak rupee hammered risk appetite amid an already uncertain global environment.

The BSE oil and gas index was the worst performer among sectoral peers, sinking 3.81 per cent, after Brent crude oil rates crossed USD 76 a barrel on supply disruptions and US attempts to curb Iranian shipments.

The rupee hit one-and-a-half year lows against the US dollar intra-day amid persistent foreign capital outflows, underscoring emerging markets risks.

The 30-share Sensex opened in the green and hit a high of 35,618.85, but soon turned lower on widespread selling. It finally ended at 35,217.11, down 272.93 points, or 0.77 per cent.

This is its lowest closing since June 6, when it had settled at 35,178.88.

The wider NSE Nifty touched a low of 10,652.40 before finishing at 10,671.40, showing a loss of 97.75 points, or 0.91 per cent.

Sentiment took another hit after the RBI, in its Financial Stability Report (FSR) yesterday, said the banking sector's NPA situation is likely to worsen further.

State-run lenders came under heavy selling pressure, with PNB, Bank of Baroda, SBI, Syndicate Bank, Oriental Bank of Commerce and Union Bank of India falling up to 6.61 per cent.

The June month expiry in the derivatives segment tomorrow also forced investors to adopt a cautious stance, brokers said.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 538.40 crore, while domestic institutional investors (DIIs) bought shares worth Rs 238.05 crore yesterday, as per provisional data.

"Market sentiment is getting weak due to weakening rupee and lingering trade war between US and other major economies.

"The market is struggling for direction due to lack of domestic triggers while investors remained on a cautious note ahead of F&O expiry. Banks and Metals led the losses while IT outperformed due to rupee depreciation," said Vinod Nair, Head of Research, Geojit Financial Services.

ICICI Bank emerged as the biggest loser among Sensex constituents by plunging 3.16 per cent.

L&T fell 2.71 per cent, Tata Motors 2.22 per cent, SBI 2.06 per cent, Adani Ports 1.75 per cent, Power Grid 1.75 per cent, Bajaj Auto 1.70 per cent, Bharti Airtel 1.42 per cent and RIL 1.37 per cent, among others.

Only HDFC Bank, Coal India, TCS and Sun Pharma finished with gains, rising up to 0.89 per cent.

Among state-run oil companies, BPCL plunged 8.04 per cent, HPCL 7.45 per cent and IOC 6.18 per cent.

Sector-wise, the BSE oil & gas index plunged 3.81 per cent, while PSU fell 2.84 per cent, infra 2.67 per cent, capital goods 2.37 per cent, power 2.25 per cent, realty 2.02 per cent, auto 1.34 per cent, metal 1.14 per cent, banking 1.04 per cent, FMCG 0.58 per cent, healthcare 0.34 per cent and consumer durables 0.31 per cent.

The IT index managed to end higher as a weak rupee spurred demand for software exporters.

In keeping with the overall trend, the small-cap and mid indices shed up to 2 per cent.

Most global markets tumbled as jitters over trade conflicts between the US and other major economies lingered.

In the Asian region, Japan's Nikkei fell 0.31 per cent, Shanghai Composite Index shed 1.10 per cent, Hong Kong's Hang Seng fell 1.82 per cent, while Singapore lost 0.80 per cent.

Among European markets, Frankfurt's DAX fell 0.66 per cent and Paris CAC 40 slipped 0.64 per cent in their early deals. London's FTSE too lost 0.05 per cent.