Sensex drops 301 pts ahead of Karnataka floor test

TNN
Mumbai: With the Supreme Court asking the BJP to prove its majority in the Karnataka assembly on Saturday while rejecting its demand for a 15-day window do so, Dalal Street traders suddenly turned jittery and offloaded their speculative positions in Friday’s session. This pulled the sensex down by 301 points to below 35k level, at 34,848. The benchmark closed below the 35k level again after two weeks.On the NSE, the Nifty too closed below the 10,600-mark, at 10,596, down 86 points on the day.
According to V K Sharma, head, private client group & capital market strategy, HDFC Securities, the SC’s direction weakened the market that was already reeling under the pressure of rising bond yields and surging crude oil prices. Market players said if the BJP wins the floor test on Saturday, the market could rally on Monday.
In the international market on Friday, brent crude was trading around the $80-per-barrel level while US 10-year bond yield was at 3.07%. In the Indian market, the 10-year benchmark yield closed at 7.83%, barely changed from its previous close.
“Rising crude, bond yields and dollar had been the worries for the market from quite some time in terms of its impact on fiscal deficit, inflation and RBI policy,” said Teena Virmani, VP, research, Kotak Securities. “Further up move in crude prices or rising yields is likely to be negative for markets. Eyes will also be on developments in US-China trade negotiations,” Virmani said.
Among the sensex stocks, L&T closed 3.5% lower, while ICICI Bank and Sun Pharma both were down 3.2% each. Among the gainers, HUL closed 2.2% higher while Kotak Bank was up 2%.
Outside of the sensex, Avenue Supermarts, the company that operates D-Mart retail chain, closed more than 5% down after its main promoter, Radhakishan Damani informed the exchanges that he intends to sell 1% of the company’s equity to meet the rules governing minimum public shareholding. Outside of the blue chips, mid cap and small cap stocks were battered with BSE’s midcap index closing 1.5% lower while the small cap index closed 1.6% lower.