It was a good start to the market on the Friday’s morning when the domestic market’s both benchmark indices Nifty & Sensex opened on a positive note. The positive global cues and a strong start in rupee were aiding the sentiment on D-Street. Even Nifty succeeds to reclaim the 11,300 in the opening minutes. Most of the sectoral indices were trading in green.
But, the shares of Yes Bank dropped 30 percent just after the Reserve Bank of India (RBI) shortened Rana Kapoor’s term as CEO and Managing Director. On the other hand, the shares of Cipla rose around 2 percent as investors bet on an approval for drugs by US Food and Drug Administration. And after the approval, the Cipla share price gained 1.6 percent after the pharma company received approval from the US Health regulator for the anti-nausea drug.
But, Nifty couldn’t hold on to its morning gains and lost all its gains in the afternoon sessions and plunged to the level below 11,000. It is due to a bigger selloff in midcaps which has dragged down the markets. And Yes Bank, HUL, and Indiabulls are the ones who lost the most. There were other heavy selloffs in stocks in the non-banking financial companies (NBFCs) led by a fall in Dewan Housing Finance (DHFL). DHFL lost Rs. 10,000 crores in market-cap.
On top of that, the rupee went back to 72 per US dollar mark and depreciated almost half a per cent.
There was some recovery in the market after management of DHFL and Indiabulls Housing tried to allay investor fears.
The automobiles, metals, pharmaceuticals, banks, and FMCG all saw a selloff. According to the Sanjiv Bhasin of IIFL, the real weakness in the market is not due to a depreciating rupee but this issue with the fiasco around IL&FS.
Currently, Nifty is hovering around 11,160.25 (03:22 PM IST). Let’s see how this heavy selloff affects the market and investors in the upcoming days.