Sensex falls over 100 points after IMF cuts India’s growth outlook
Domestic equity benchmark BSE Sensex dropped over 100 points in early trade on Wednesday as investor sentiment dampened further after IMF cut India’s growth outlook.
After swinging nearly 250 point in highly volatile opening session, the 30-share index was trading 104.13 points or 0.27% lower at 37,878.61 at 09:30 hours; and the broader Nifty also fell 38.30 points or 0.34% to 11,292.75. In the previous session, the 30-share index ended 48.39 points, or 0.13%, lower at 37,982.74. The Nifty too slipped 15.15 points, or 0.13%, to close at 11,331.05.
In early trade, shares of Vedanta, IndusInd Bank, M&M, Maruti, Bajaj Auto, Bharti Airtel, ICICI Bank, Bajaj Finance, Tata Steel and RIL were among the top losers in the Sensex pack, falling up to 1.99%. On the other hand, HDFC Bank, Yes Bank, PowerGrid, TechM, HUL, SBI and HDFC Bank rose up to 1.69 per cent.
According to experts, IMF’s downward revision of India’s economic outlook hit domestic investor sentiment. The IMF on Tuesday projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3% for both the years, saying its GDP will now grow respectively at the rate of 7 and 7.2 per cent reflecting a weaker-than expected outlook for domestic demand.
“India’s economy is set to grow at 7.0% in 2019, picking up to 7.2% in 2020. The downward revision of 0.3 percentage point for both years reflects a weaker-than expected outlook for domestic demand,” the International Monetary Fund (IMF) said in its World Economic Update.
Heavy foreign fund outflow and weak corporate earnings are also pushing the market lower, they said. On a net basis, foreign institutional investors sold equities worth ₹2,607.97 crore, while domestic institutional investors purchased shares to the tune of ₹2,625.10 crore, provisional data available with stock exchanges showed on Tuesday.
Elsewhere in Asia, Shanghai Composite Index, Hang Seng, Nikkei and Kospi were trading in the green in their respective early sessions. Equities on Wall Street too ended on a positive note on Monday.
Meanwhile, the Indian rupee depreciated 8 paise (intra-day) to 69.03 against the U.S. dollar. The global oil benchmark Brent crude futures were trading marginally higher at 63.98 per barrel.