Sensex dips by 47 pts after Moody's move to settle at 27,831
Market on Monday reversed some gains of the past two sessions as the benchmark BSE Sensex cracked below the 28,000-level by dropping 189 points on slump in country's exports and continued depreciation in rupee.business Updated: Aug 18, 2015 19:03 IST
After a promising start, the markets on Tuesday fell for the second consecutive day and saw all its early gains go up in smoke as the benchmark BSE Sensex lost 47 points after Moody's slashed India's GDP forecast to 7%.
Cautioning against growth risks, Moody's Investors Service on Tuesday lowered its India growth forecast for this fiscal to 7% from 7.5% earlier, citing below-par rainfall.
The market performance was weighed down by heavy selling in blue-chips like HDFC, Lupin and Sun Pharma. The monsoon deficit was another sticking point for investors, which widened to 10% as El Nino phenomenon gathered steam.
A sharp correction in Chinese stocks amid concerns over the country's financial health gave bears an upper hand. The BSE metal index fell close to 2% on fears that China's economy may be losing ground.
Reclaiming the 28,000-mark in early trade, the Sensex hit a high of 28,040.73, but failed to latch on to gains as it settled at 27,831.54, a fall of 46.73 points or 0.17%.
The 50-share NSE Nifty remained lacklustre too, which dropped 10.75 points or 0.13% to close at 8,466.55.
"Domestic indices slipped after a positive opening on the back of a fall in the Chinese markets and on the news of Moody's reducing the country's GDP forecast," said Alex Mathews, research head at Geojit BNP Paribas Financial Services.
The bear grip was in full display as 22 out of the 30-share Sensex pack ended in the red. GAIL was the worst-hit, down 4.43%, followed by Coal India and Cipla.
Tata Steel, Maruti Suzuki and Infosys were some of the bright spots though. Sector-wise, the BSE metal index took the biggest blow, down 1.92%, followed by healthcare, PSU and realty.
In broader markets, small-cap and mid-cap indices rose up to 0.85% as investors widened bets. Globally, Asian shares closed with losses, with the Shanghai index plunging 6.15%, its biggest fall in 3 weeks. European stocks were quoting lower in their early trade. Foreign portfolio investors bought shares worth Rs 142.34 Foreign portfolio investors bought shares worth Rs 142.34 crore on Monday, according to provisional data.
IT remained the clear winner of the day on the back of prevailing weakness in the rupee.
The forex market was closed on Tuesday on account of Parsi New Year.
"Led by healthy interest from FIIs and DIIs and the reduction in commodity prices, India can be expected to continue to outperform other emerging markets... Interest will shift to IT, pharma, PSU oil and FMCG stocks due to additional stability in earnings led by currency benefits," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
The market breadth turned positive as 1,631 stocks gained, 1,239 declined while 114 stocks ruled steady.
The total turnover rose to Rs 3,154.74 crore, from Rs 2,928.62 crore on Monday.