Sensex tanks 330 pts, Nifty below 12K as Moody’s cuts India credit outlook

Sensex ended the intraday trade down 330.13 points, or 0.81 per cent lower at 40,323.61.

Benchmark equity indices — Nifty and Sensex — ended the intraday trade on a negative note after the global rating agency Moody’s cut India’s credit rating outlook. The bourses also fell due to weakness in IT, FMCG, metal and energy stocks.  Sensex ended the intraday trade down 330.13 points, or 0.81 per cent lower at 40,323.61. Similarly, the broader NSE Nifty plunged 103.90 points, or 0.86 per cent, to end at 11,908.15. The top laggards in the Sensex pack included Sun Pharma, Vedanta, ONGC, TCS, HUL, ITC, NTPC, Asian Paints and Infosys. Yes Bank, IndusInd Bank, ICICI Bank, Kotak Bank, Tech Mahindra and HCL Tech were the major gainers.

Moody’s Investors Service on Friday cut India’s rating outlook to negative from stable citing growth concerns.  The prospects of further reforms that would support business investment and growth at high levels, and significantly broaden the narrow tax base, have diminished,” Moody’s said in its report. The global rating agency affirmed the Baa2 foreign-currency and local-currency long-term issuer ratings for India.

“We expect profit-taking to extend further in the index and 11,700 would act as crucial support ahead. Despite the overall buoyancy, we usually see stocks reacting sharply lower during corrective phase of the index thus we suggest keeping few short positions also,” Ajit Mishra Vice President, Research, Religare Broking.

Also read: After rating outlook cut, Moody’s gives solution to India on how to restore its credit rating glory

The Indian rupee also depreciated 33 paise to 71.30 against the US dollar intraday. The brent crude futures, the global oil benchmark, fell 1.24 per cent to USD 61.53 per barrel.

Meanwhile, commenting on how the entire week fared for the stock markets, Vijay Kuppa, Co –Founder, Orowealth said, “this week the market started on a positive note with some good set of numbers posted by auto majors. Maruti and Eicher reported some revival in sentiments in the festive season. Also the developments between US and China on the trade front was positive was the global markets.”

“On the domestic front, most of the companies which declared their results were better than market expectations and hence there was a revival witnessed in may stocks. The government launched a fund for INR 25,000 crs along with other investors to revive stalled housing projects. Such a move had a positive impact on the housing, construction and ancillary sector stocks which rallied between 3 to 10%,” he added.