Stocks continued to slide on Monday for the seventh consecutive session, buffeted by fears over US President-elect Donald Trump’s threats to slap punitive duties on imports from China and the persistent outflow of dollars from the country as foreign portfolio investors sold shares.
The 30-stock Sensex fell by 241.30 points, or 0.31 per cent, to close at 77,339.01 after a very choppy day of trading.
The index tipped into a “correction zone” – which markets ascribe to a situation that arises when the market bellwether tumbles by 10 per cent from a recent high.
The index plummeted by over 10 per cent from the high of 85,978.25 on September 27. A 10 per cent decline from that level sets the critical threshold at 77,380.42, which has now been breached.
Last week, the Nifty had entered its correction zone which prompted some analysts to forecast that stock prices would fall further in the coming days.
During intra-day trades, the Sensex fell 615.25 points to 76,965.06. On the NSE, the Nifty fell by 78.90 points to settle at 23,453.80.
The relentless selling by the FPIs has been trigged by disappointing second quarter results and the swift run up in stock prices after the general elections in May.
More recently, Trump’s victory has sent shivers through the markets after his rousing threats to raise protectionist barriers by slapping 60 per cent tariffs on imports from China.
The concern is that such a course of action will keep inflation in the US well over the Federal Reserve’s mandate of 2 per cent, reducing the chances of big rate cuts in the world’s biggest economy.
Provisional data from the bourses showed that FIIs sold stocks worth ₹1403.40 crore in today’s trade. So far in November, they have offloaded equities worth $ 2.83 billion as per NSDL data.
IT stocks witnessed selling pressure amid worries that Trump’s policies would stall technology contracts.
Tata Consultancy Services was the biggest loser as it fell by 3.05 per cent. Infosys, NTPC, HCL Technologies, Axis Bank, Tech Mahindra, Bajaj Finserv, Sun Pharma, and IndusInd Bank also tumbled on a hectic day of trading. Reliance Industries fell by 2.82 per cent. However, Tata Steel, Hindustan Unilever, Mahindra & Mahindra, Nestle and State Bank of India gained.
