MUMBAI: Indian stock markets slumped today ahead of the expiry of the November derivative series on Thursday. The decline was led by index heavyweights Reliance Industries, Infosys Ltd, and HDFC.
The benchmark Sensex fell 0.55% on Wednesday to close at 58,340, a level last seen on 14 September. Nifty, on the other hand, fell 0.5% to 17,415 – a level last seen on 20 September.
“The news of the COVID situation worsening globally has started weighing on the sentiment along with the inflation fear. And since there’s no major event on the domestic front, markets will continue to take cues from global counterparts. At the same time, the scheduled monthly expiry would keep the traders busy on Thursday.” said Ajit Mishra, VP – Research, Religare Broking.
Shares of One97 Communications, parent of Paytm, rose for the second consecutive day on Wednesday, easing from a selloff that had wiped out around a third of its value in the first two trading sessions. The stock advanced 17.3% but was still down over 18% from its offer price.
Reliance Industries fell, with the stock ending at ₹2,351 apiece on the BSE, down 1.44%. The scrip has lost over 9% after it decided to scrap its plan to sell a 20% stake in its oil to chemicals unit to Saudi oil major Aramco.
Investors will now wait for key US data including Fed minutes which may throw light on economic recovery and monetary policy outlook.
Third quarter GDP print, October durable goods, and the weekly initial jobless claims data are also due ahead of Thursday’s Thanksgiving holiday.
Global cues were weak as Germany announced considering a full covid lockdown. Asian shares fell Wednesday as worries about inflation set off expectations that the U.S. Federal Reserve may raise interest rates sooner than expected. European stocks inched higher even as investors monitored latest data out of the euro zone and the region’s latest covid surge.
“Going ahead, the markets are likely to continue with consolidation given weak global cues, persistent FII selling and premium valuation. In the absence of any fresh trigger and subdued sentiments, investors would await for the fundamentals to catch up with valuations”, said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
“Market could take direction from the US economic data and US Fed minutes which would be released later today as it fears the pace of tapering to be accelerated which could prepone the interest rate hike cycle. It would also track the Covid situation in Europe which could impact the global economic activities. Monthly F&O expiry tomorrow could add to the volatility”, Khemka added.
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