After opening about 600 points lower following a late overnight selloff in the US market, the index further lost steam through the session and closed at 54,303, down 1,017 points or 1. 8%. On the NSE, the Nifty lost 276 points, also 1. 8%, to close at 16,202. The day’s selling, like in the past several weeks, was led by foreign funds.
BSE data showed that Friday’s net outflow from the stock market was nearly Rs 4,000 crore. Domestic funds, on the other hand, had a net buying figure of Rs 2,831 crore. Reliance Industries, along with banks and IT stocks, led the sensex’s slide. Of the 30 sensex stocks, only eight closed with gains. The session’s selling left investors poorer by Rs 3. 2 lakh crore with the BSE’s market capitalisation now at Rs 255. 2 lakh crore, official data showed.
According to Emkay Wealth Management head (research) Joseph Thomas, Shanghai being shut down once again soon after its reopening, the prospects of lower global economic growth, and pessimistic projections of expected critical data like the US and India CPI (consu- mer price index) inflation are factors that have caused some gloom among investors. “The US Fed meeting next week, the results of which will be known by June 14 evening, is also a major event the market is looking forward to, and most analysts expect a hike of 50 basis points (100bps = 1 percentage point) by the Fed. ”
Looking ahead, the rapidly rising number of Covid-positive cases in India may put a damper on investor sentiment. The continuous selling by foreign funds is also weighing, Thomas wrote in a note. According to data compiled from CDSL and the BSE, so far in 2022, foreign funds have net sold stocks worth nearly Rs 1. 85 lakh crore while, across all asset classes — including stocks, debt and hybrid instruments — net outflow is a little over Rs 1. 9 lakh crore.