SENSEX DOWN 470 PTS, NIFTY ENDS AT 7-MONTH LOW

MUMBAI: Battered by a combination of local and global headwinds, Indian stocks have plunged over 10% since their record highs on June 3, wiping off investor wealth totalling ₹17.6 lakh crore in less than four months. Given the possibility of fewer rate cuts by the US Federal Reserve and concerns on the domestic economy, the BSE Sensex index on Thursday closed 1.29%, or 470.41 points, lower at 36,093.47, while the 50-share Nifty lost 135.85 points, or 1.25%, to end the day at 10,704.80.

In the last four sessions alone, the Sensex has lost 3.4%, but fell 0.06% so far in 2019, while the Nifty is down 1.59% in 2019. The Sensex has now fallen 10.5% from its all-time high of 40,312.07 on June 3. The Nifty is down 11.6% from its all-time high of 12,103.05. The market value of Indian companies now stands at ₹138.54 trillion. Analysts said the recent fall signals uneasiness among market participants looking for major steps to arrest the economic slowdown. Investors have also been concerned over slowing consumer demand and tax shortfalls. According to a PTI report, the government has missed the tax collection target by a wide margin in April-September. Against a steep 17.5% higher tax collection budgeted for the full year, the government could mop up only 4.7% more so far this year, with the direct tax kitty growing to ₹5.50 lakh crore as on September 17, up from ₹5.25 lakh crore a year-ago.

“The market correction is mainly due to global uncertainties, outcome of the trade war between the US and China, while the pace of rate cut by the US Federal Reserve is also likely to slow down as indicated by the central bank,” said Shibani Kurian, head-equity research, Kotak Mahindra Asset Management Co. Ltd. Kurian said volatility will continue for a while, but there’s opportunity in the long term. “FIIs may look for markets with higher growth potentials. Outcome of Indian government spending may be visible in the second half of FY20, while rural consumption growth may be uplifted by good monsoon and festivals.”