Stocks tumbled for the fifth day running with the spiralling tensions in West Asia and persistent foreign fund outflows stifling the chances of a recovery.
The bearish trend is such that any rally is an opportunity to sell for investors as the market capitalisation of the BSE shrank ₹16.2 trillion since Friday last.
This was in evidence on Friday as the 30-share Sensex after opening lower at 82244.25 hit a high of 83368.32 in post noon-trades.
But selling resumed and the index hit a low of 81532.68 — a fall of more than 1835 points from the day’s peak. It subsequently settled 808.65 points or 0.98 per cent lower at a three-week low of 81688.45.
The NSE Nifty slumped 235.50 points or 0.93 per cent to 25014.60 after touching a low of 24966.80 during intra-day trades.
Analysts are divided on whether stocks would come under selling pressure: some are of the view that stocks are now in an over-sold territory, but there are others who fear the simmering tensions between Israel and Iran could keep riskier assets on edge.
However, there was some relief for domestic investors after market hours as nonfarm payroll data showed the US economy adding 254,000 jobs in September, which beat expectations.
US stocks surged on Friday, with the S&P 500 near a record high as investors cheered the labour report.
“The increase in geopolitical tensions between Israel and Iran weighed on risk assets. In global news, mounting geopolitical tensions have contributed to a shaky start in October for the stock market,” Shrikant Chouhan, head of equity research, Kotak Securities, said.
The analysts said Sebi’s norms on trading in futures & options and China’s stimulus amid its cheaper valuations have also been pulling down stocks.
Provisional data from the stock exchanges showed foreign investors selling stocks worth ₹9,897 crore on Friday. According to NSDL data, FPIs have net sold stocks worth almost $2 billion so far this month.
At the forex markets, there was no change in the rupee’s movement which closed at 83.97 against the dollar. The domestic unit opened at 83.95 against the previous close of 83.97, even as crude oil prices rose because of tensions in West Asia.
