Sensex, Nifty fall for 3rd day as US rating downgrade triggers global equity sell-off

Mumbai: Benchmark Sensex tanked 542 points to settle at a four-week low while Nifty closed below the 19,400 mark, extending their losses for a third straight day on Thursday in tandem with a bearish trend in global markets following the US rating downgrade.

The 30-share BSE Sensex fell by 542.10 points or 0.82 per cent to settle at a four-week low of 65,240.68. During the day, it slumped 819.7 points or 1.24 per cent to 64,963.08.

The NSE Nifty declined below the 19,300 mark in intraday trade before paring some of the losses to close at 19,381.65, still down by 144.90 points or 0.74 per cent. It moved in a range of 19,537.65 to 19,296.45 in day trade.

In three days of losses, Sensex plunged by around 1,287 points or 2.16 per cent while Nifty has tanked 372 points or 2.42 per cent.

"Global markets are still grappling with the impact of the US rating downgrade, with spiking bond yield and strengthening dollar index," Vinod Nair, Head of Research at Geojit Financial Services said.

Fitch Ratings lowered the US government credit rating by one level, citing rising debt and a steady deterioration in standards of governance. The downgrade triggered a sell-off in US stock markets.

From the Sensex pack, Titan fell the most by 2.56 per cent after the company reported a 4.3 per cent drop in consolidated net profit at Rs 756 crore for the June quarter.

Bajaj Finserv, ICICI Bank, HDFC Bank, Reliance Industries, Nestle, UltraTech Cement, Bajaj Finance, Maruti, Tata Consultancy Services, IndusInd Bank and State Bank of India were the major laggards.

Infosys emerged as the biggest gainer rising by 0.63 per cent. JSW Steel, NTPC and Power Grid were also among the gainers. In total, 23 Sensex stock dropped while seven advanced.

The pharma sector managed to weather the storm thanks to its strong earnings outcome, while mid and small-cap stocks outperformed the benchmark index, Nair said.

"The domestic services PMI has surpassed market expectations, reaching a 13-year high due to a rise in new orders, particularly in international sales," he added.

In the broader market, the BSE smallcap gauge climbed 0.23 per cent and midcap index gained 0.14 per cent.

Among indices, realty fell by 1.85 per cent, metal declined by 1.15 per cent, bankex (1.06 per cent), financial services (0.94 per cent), oil & gas (0.92 per cent) and consumer durables (0.84 per cent).

Healthcare, utilities and power were the gainers.

"The recent drift in the global indices is putting pressure now and we expect the negative tone to continue," Ajit Mishra, SVP - Technical Research, Religare Broking Ltd said.

In the broader market, Sanghi Industries jumped 5 per cent after Ambuja Cements announced the acquisition of a majority stake in the cement manufacturer at an enterprise value of Rs 5,000 crore.

Ambuja Cement shares closed higher by 2.87 per cent.

In Asian markets, Seoul, Tokyo and Hong Kong ended in the negative territory while Shanghai settled in the green. European markets were trading in the red.

Foreign institutional investors (FIIs) offloaded equities worth Rs 1,877.84 crore on Wednesday, according to exchange data.

Global oil benchmark Brent crude dipped 0.46 per cent to USD 82.82 a barrel.

Meanwhile, India's services sector growth touched a 13-year high in July as a substantial improvement in demand conditions and pick-up in international sales induced the strongest increase in new business and output, a monthly survey said on Thursday.