The benchmark indices slid more than 1% on Thursday amid weak global cues and concerns over global growth. The lower-than-expected GDP growth for the first quarter and the marginal fall in the manufacturing PMI for August also weighed on the sentiment.
Globally, market participants are now confronted with an environment of slowing growth, rising probability of recession, elevated inflation and central banks that are determined to hike interest rates and stay the course.
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The BSE Sensex fell 1,014 points intraday before closing at 58,766, down 1.3%. The Nifty 50 settled at 17,543, down 1.2%.
The advance-decline ratio was in the positive at 1.08:1, with volumes being higher than the recent average. Oil & gas, metals and IT indices fell the most, with heavyweights RIL, Infosys, ICICI Bank, TCS and HDFC contributing the most to the Nifty’s fall.
Foreign portfolio investors sold shares worth Rs 2,290 crore on Thursday, provisional data showed. Investors have sold shares worth $20.8 billion in the year to date.
On Thursday, global credit rating agency Moody’s Investors Service lowered its GDP growth forecast for India to 7.7% for the calendar year 2022 amid rising interest rates, uneven monsoon and slowing global growth. The forecast for CY23 was cut to 5.2% from 5.4%.
India’s manufacturing activity improved in August, although S&P Global’s Purchasing Managers’ Index edged down to 56.2 from an eight-month high of 56.4 in July.
Global markets extended declines for the fifth day as weak Chinese data and new Covid-19 lockdowns in the world’s second-largest economy weighed on sentiments. Global factory activity slumped in August as Russia’s war in Ukraine and China’s zero-Covid curbs continued to hurt businesses, surveys showed on Thursday. However, there were indications that cost pressures are starting to ease. Among peers, the Kospi, Taiwan Weighted and Hang Seng slid between 1.8% and 2.3%.
“Nifty failed to build on to the large gains made on the previous day. Global sentiments have been able to halt the rallies in India over the past few weeks, though the broader market seems positive. 17,696-17,345 could be the band for the Nifty in the near term,” said Deepak Jasani, head of retail research at HDFC Securities.
