Domestic stock markets took a sharp dive on Friday, with the BSE Sensex and NSE Nifty50 slipping over 1% each.
At 11:27 am, the Sensex was down 883.93 points to 81,317.23, while the Nifty50 fell 255.95 points to 24,889.15. The broad decline affected all sectors, with major contributors to the Sensex’s drop including Reliance Industries, SBI, ICICI Bank, L&T, Infosys, ITC, HCL Tech, and HDFC Bank.
The Nifty PSU Bank and Oil & Gas indices fell over 2%, while Auto, Bank, Media, Metal, and Consumer Durables sectors were down by more than 1%. Small-caps and mid-caps also saw losses, falling 0.9% and 1.3%, respectively.
It may be noted that the total market value of BSE-listed companies plummeted by over Rs 4 lakh crore.
Market turmoil linked to US jobs data
The market turmoil is largely attributed to investor anxiety ahead of the US non-farm payrolls report, set to be released later today. Analysts are anticipating an increase of 165,000 jobs and a drop in the unemployment rate to 4.2%.
However, concerns over softer job openings and fewer gains in the private sector have raised the possibility of a half-point rate cut by the Federal Reserve.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “If the August jobs data falls short of expectations and unemployment rises higher than forecast, the Fed may cut rates by 50 basis points. However, this may not be well-received by the market, as serious growth concerns and fears of a hard landing for the US economy could weigh heavily.”
“The market may react negatively, factoring in serious growth concerns and even a hard landing scenario for the US economy,” he added.
Meanwhile, MSCI’s Asia-Pacific index inched up 0.2% in the global markets, while the Nikkei slipped 0.1%. US futures also showed declines.
Foreign institutional investors (FIIs) were net sellers on September 5, offloading equities worth ₹688 crore, while domestic institutional investors (DIIs) bought equities worth ₹2,970 crore.
Oil prices remained steady, with Brent crude at $72.7 and US West Texas Intermediate at $69.16. The Indian rupee appreciated slightly, trading at 83.9350 against the US dollar, up from 83.9825 in the previous session.