Stocks beat a retreat on global meltdown
Mumbai: Stocks tripped over growing worries about a rise in interest rates and a global rout in equities on Friday, with the benchmark Sensex falling over 1 per cent to close at a one-month low and the broader Nifty crashing below the 10500-level.
The 30-share Sensex closed lower by 407.40 points, or 1.18 per cent, at 34005.76. This is the weakest closing since January 4 when it had ended at 33969.64.
The broad-based Nifty fell by 121.90 points, or 1.15 per cent, to end at 10454.95.
On a weekly basis, the BSE Sensex recorded a steep fall of 1060.99 points, or 3.02 per cent, while the broader Nifty lost 305.65 points, or 2.84 per cent, - their worst weekly fall since August.
"The trend in global interest rates and the subsequent impact on inflation, global economic growth as well as flow of funds, influenced investor sentiment through the week," said Karthikraj Lakshmanan, senior fund manager (equities), BNP Paribas Mutual Fund.
Rising global rates are likely to impact the flow of funds to riskier assets such as emerging markets, experts added.
Stock exchanges on Friday said they would immediately stop the trading of indices of Indian securities on foreign bourses as part of a joint effort to stymie the migration of liquidity to overseas markets.
The decision of the three exchanges - BSE, NSE and the Metropolitan Stock Exchange of India (MSEI) - came after Sebi asked them to suspend trading of their indices in international markets.
The move assumes significance at a time the Singapore Stock Exchange has launched trading in single-stock futures in 50 of India's top companies that are part of the Nifty index - a development that has triggered concerns about liquidity moving out of the country.