Sensex closes 69 points lower on global sell-off; auto stocks hit hard
Equities came off for the first time in three days on sell-off in auto stocks after some popular car models failed safety crash test and downbeat global cues as strong US data boosted prospects of an interest rate hike by the Federal Reserve.business Updated: May 18, 2016 19:04 IST
Equities came off for the first time in three days on sell-off in auto stocks after some popular car models failed safety crash test and downbeat global cues as strong US data boosted prospects of an interest rate hike by the Federal Reserve.
Country’s largest carmaker Maruti Suzuki plunged 0.81% to Rs 3,917 after the firm’s Celerio and Eeco models failed crash test by safety group Global NCAP. Besides, the parent company, Suzuki, admitting to using improper fuel economy testing methods had a bearing on its shares.
Mahindra & Mahindra succumbed 1.59% to Rs 1,320.10 while the overall BSE auto index tanked 1.28%.
Shares of state-run Punjab National Bank rose 3.25% despite the company posting a record net loss of Rs 5,367.14 crore for the fourth quarter.
“Prospects of higher interest rates in the US increased after latest data showed that US consumer prices rose in April at the fastest pace in three years,” said Shreyash Devalkar, Fund Manager – Equities at BNP Paribas Mutual Fund.
The benchmark BSE Sensex opened lower and stayed in the red and touched a low of 25,503.40 largely in tune with weak global shares. However on emergence of buying in SBI, ONGC and L&T, later it trimmed losses and finally settled 69 points or 0.27% lower at 25,704.61.
It had gained 284.04 points in the last two sessions.
The NSE 50-share Nifty also went down by 20.60 points or 0.26% to close at 7,870.15.
Shares of associate banks of SBI - State Bank of Mysore and State Bank of Travancore extended their rally for a second day and rose 9.44% and 2.37% on the proposed merger of its five associate lenders with the parent firm.
In broader markets, the BSE’s small-cap index ended 0.22% higher while mid-cap shed 0.01%.
Global trading sentiment was subdued as Asian markets retreated following overnight sharp sell-off in the US as a better-than-expected data fuelled speculations the Fed could raise interest rates as soon as next month.
Japan’s Nikkei ended 0.05% lower despite a better- than-forecast economic growth data. Hong Kong’s Hang Seng finished 1.45% down while Shanghai Index fell 1.27%.
Europe was down too with key indexes in France, Germany and the UK taking a hit of up to 0.50%.