Stock markets plunge in early trade on weak global trends, unabated foreign fund outflows

Mumbai, May 30

Benchmark equity indices plunged in early trade on Thursday, continuing to fall for the fifth day running, in line with weak global trends and unabated foreign fund outflows.

The 30-share BSE Sensex declined 315.53 points to 74,187.37. The NSE Nifty tanked 102.60 points to 22,602.10.

From the Sensex firms, Tata Steel, JSW Steel, Power Grid, Titan, Nestle India and Bajaj Finserv were the biggest laggards.

Axis Bank, State Bank of India, Kotak Mahindra Bank, ICICI Bank, IndusInd Bank and HDFC Bank were among the gainers.

In Asian markets, Seoul, Tokyo, Hong Kong, and Shanghai were quoting lower.

Meanwhile, Wall Street ended in negative territory on Wednesday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 5,841.84 crore on Wednesday, according to exchange data.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, equity markets are likely to see heightened volatility on 3rd and 4th June. “If the exit polls indicate a clear trend, which is favourable from the market perspective, buying decisions will be easy even after a spike in prices.

The last phase of polling for the ongoing general elections is scheduled for June 1 and the results will be declared on June 4.

“The highly valued mid and smallcaps remaining resilient and the fairly valued largecaps turning weak is a short-term aberration. Long-term investors can profit from this temporary aberration,” he said.

Besides, spike in US bond yields pushing the 10-year yield above 4.6 per cent is a major concern, he said, adding, “this can trigger continuation of the FII selling which will depress the prices of largecaps further”.

Global oil benchmark Brent crude went lower 0.05 per cent to USD 83.55 a barrel.

On Wednesday, the 30-share BSE Sensex declined 667.55 points or 0.89 per cent to settle at 74,502.90. The NSE Nifty dropped 183.45 points or 0.80 per cent to close at 22,704.70.