An across-the-board sell-off dragged the benchmark indices around a per cent lower on Friday as sombre global mood hit markets during the second-half of the trading session. US 10-year Treasury yields rose again on Friday, back above 1.6 per cent, and were on track to rise for the seventh straight week. Add to it, the dollar index rose 0.4 per cent denting sentiment further.
Against this backdrop, gains in Asian stock markets proved tough to match for most of European peers, after they hit a 1-year high in the prior session. Nasdaq Futures, which tumbled over 1.5 per cent, or 200 points, also suggested a lower start for Wall Street later in the day.
Japan’s Nikkei added 1.7 per cent – but this faded out as Europe opened for business. Britain’s FTSE 100 and the STOXX Europe 600 slipped around 0.5 per cent each, weighing on the MSCI World Index, which was down 0.1 per cent.
Back home, the equity indices snapped their three-day winning streak and settled 0.9 per cent lower. The frontline S&P BSE Sensex dropped 487 points, or 0.95 per cent, to end the day at 50,792 levels. From the intra-day high of 51,822, the index plunged 1,284 points to hit an intra-day low of 50,538.
On the NSE, the Nifty index held the 15,000-mark to close at 15,031 levels, down 144 points, or 0.95 per cent. In the intra-day trade, the index hit a low of 14,954.
26 of the 30 constituents on the Sensex and 42 of the 50 constituents on the Nifty ended the day in the red. Hindalco, Bajaj Auto, HDFC Life, SBI Life, Maruti Suzuki, Adani Ports, IndusInd Bank, ICICI Bank, Hero MotoCorp, SBI, and Reliance Industries, all down between 2 per cent and 3 per cent, were the top laggards on the indices.
On the flipside, PowerGrid, Titan Company, Infosys, ONGC, Bajaj Finance, Indian Oil Corp, BPCL, and JSW Steel remained the top gainers on the benchmark indices.
In the broader markets, the S&P BSE SmallCap index fended the fall and settled 0.14 per cent higher, supported by gains in Apollo Pipes, Jindal Poly Firms, MTNL, BGR Energy Systems, Delta Corp, and Meghmani Organics. The MidCap counterpart, however, fell 0.45 per cent.
Individually, shares of IDBI Bank surged 17 per cent to Rs 44.80 on the BSE in intra-day trade after the Reserve Bank of India removed the lender from the prompt corrective action framework on improving finances and credit profile. This eases the rules for the lender to expand its business and also sets the stage for strategic divestment by the government which holds a 45.48 per cent stake in the firm. The stock ended 10 per cent higher at Rs 42 per share on the BSE.
That apart, shares of Indian Energy Exchange advanced 13 per cent to hit a new high of Rs 349 on the BSE in intra-day trade after the company entered into a strategic partnership with the National Stock Exchange of India and Oil and Natural Gas Corporation (ONGC) to build gas markets. The stock, which surpassed its previous high of Rs 322.85, touched on February 11, 2021, ended 6.5 per cent higher at Rs 328 on the BSE.
Lastly, shares of India Glycols slipped 9 per cent to Rs 529; down 13 per cent from day’s high, on the BSE in the intra-day trade after its board approved the transfer of the company’s BioEO (speciality chemicals) business to IGL Green Chemicals Private Limited (IGCPL), a wholly owned subsidiary. BioEO accounted for 13 per cent of the total revenue and 26 per cent of the total net-worth of India Glycols, as on March 31, 2020. The stock ended around 8.7 per cent lower at Rs 528 per share.
Sectorally, all the NSE indices were painted red with the Nifty Auto and PSU Bank indices down around 2 per cent each. The Nifty Bank, Financial Services, FMCG, Metal, and Private Bank indices, on the other hand, slipped nearly 1 per cent.
Here are the other top developments of the day:
>> The Rs 760-crore IPO of Anupam Rasayan has been fully subscribed till 4:00 PM on the first day of the issue.
>> In another development, BNP Paribas Cardif on Friday sold over 5 crore shares in SBI Life Insurance for an undisclosed amount through the open market sale, bringing its shareholding to less than 1 per cent in the insurer. Shares of SBI Life declined 4 per cent in the intra-day trade to hit a low of Rs 901, but recovered later to end at Rs 914 apiece.
>> That apart, media reports suggest that the Department of Financial Services has issued a memorandum to Sebi Chairman Ajay Tyagi asking him to withdraw a rule treating AT1 bonds as having 100-year maturity.
DFS has reportedly told the Sebi that considering the capital needs of banks going forward and the need to source the same from the capital markets, it is requested that the revised capital norms to treat all perpetual bonds as 100-year tenor be withdrawn.
>> In International news, global head of equity strategy at Jefferies, Chris Wood, has warned Investors against the biggest inflation scare since the 1980s. He suggests investors wait and see how the (US) Fed reacts. In the meantime, he says that treasury bonds are likely to sell off more, and cyclical stocks could rally more, before any such tapering scare.
>> Lastly, Britain’s economy shrank by 2.9 per cent in January on a monthly basis, with the trade with the European Union being hardest hit at the start of the country’s new, post-Brexit trading relationship. That said, economists polled by Reuters had expected a contraction of 4.9%.