Sensex tanks 885 pts, Nifty retreats from 25K level as weak US data triggers global equity rout

Mumbai: Halting its five-day winning run, benchmark BSE Sensex plunged 885 points on Friday due to profit-taking in metal, auto and IT stocks in line with a global selloff triggered by weak US macro data.

The 30-share BSE Sensex tanked 885.60 points or 1.08 per cent to close at 80,981.95 with 25 of its components declining and five ending with gains. During the day, it nosedived 998.64 points or 1.21 per cent to hit an intra-day low of 80,868.91.

Retreating from its record 25,000 level, the broader Nifty of NSE plummeted 293.20 points or 1.17 per cent to end at 24,717.70. The 50-issue index fell 324.05 points or 1.29 per cent to 24,686.85 during the session.

From Sensex shares, Maruti Suzuki India, Tata Motors, JSW Steel, Larsen & Toubro, Tata Steel, Mahindra and Mahindra, Tata Consultancy Services, Tech Mahindra, HCL Technologies and Infosys were the laggards.

HDFC Bank, Sun Pharmaceuticals, Kotak Mahindra Bank, Nestle India and Asian Paints were among the gainers.

"As global equity indices tumbled, investors in domestic markets too felt the heat and resorted to profit taking. The recent upsurge had made Indian stocks very expensive and hence correction was due for some time," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said.

"Despite the slump, our resilient economy and strong fundamentals along with healthy corporate earnings would keep the downside limited," he added.

Analysts said the sudden turn for the worse for the US economy reflected in the ISM Manufacturing index dipping sharply to 46.6 spooked developed country markets, bringing back recession fears in the US.

"Weak earnings from the US IT sector, a potential rise in unemployment, the possibility of further rate hikes by the BOJ, and a slowdown in China's growth are all dampening market sentiment," Vinod Nair, Head of Research, Geojit Financial Services, said.

"Q1FY25 earnings have been lackluster so far, while broader market valuations remain significantly high," he added.

The BSE SmallCap gauge fell 0.58 per cent and MidCap by 1.19 per cent in the broader market.

Among the indices, realty tumbled by 3.56 per cent, metal by 3 per cent, auto by 2.97 per cent, IT by 2.05 per cent, commodities by 1.83 per cent, teck by 1.79 per cent and capital goods by 1.70 per cent were the laggards.

Healthcare was the only gainer.

Investors wealth eroded by Rs 4.46 lakh crore in a single-day on Friday. The market capitalisation of BSE-listed companies declined by Rs 4,46,003.7 crore to Rs 4,57,16,946.13 crore (USD 5.46 trillion).

Omaxe's shares continues its slide show after declining 5 per cent -- its lower circuit limit -- following Sebi restrictions on the realty firm, its Chairman, MD, and three others from the securities market for two years for misrepresenting the company's financials.

Zomato's shares jumped more than 12 per cent after the company reported a multi-fold jump in consolidated net profit to Rs 253 crore for the June quarter.

"European shares fell more than 1 per cent on Friday, tracking a global risk-off sentiment following disappointing US growth data that sparked fears of a recession.

"A rout in Japanese markets deepened after the Bank of Japan struck a hawkish chord this week. Concerns over outlook for tech companies also weighed," Deepak Jasani, Head of Retail Research, HDFC Securities said.

In Asian markets, Tokyo, Shanghai, Hong Kong and Seoul ended lower on Thursday.European markets were quoting lower in mid-session deals on Thursday.

Global oil benchmark Brent crude rose 0.77 per cent to USD 80.13 a barrel.

Foreign institutional investors bought equities worth Rs 2,089.28 crore in the capital markets on Thursday.