Indian stock market witnesses 3rd biggest annual fall on Friday

MUMBAI — Indian stock market witnessed its third biggest fall in a day on Friday for the current calendar year as 93.5 billion U.S. dollars of investors’ wealth was wiped out with a 3 percent decline in benchmark indices.

So far, this year India’s benchmark index – Sensex reported its biggest fall on Feb. 26, losing 1,939.32 points followed by April 12 when it lost 1707.94 points.

As COVID-19 risks rise, dollar continues to strengthen and foreign investors are remitting their funds back to U.S. markets. Moreover, fear of a new highly mutated COVID-19 variant that has led to a temporary ban of flights from South Africa by the European Union also dragged the Indian markets, said Mohit Nigam, the head of the Portfolio Management Service at Hem Securities, a domestic stock brokerage house.

On Friday, Bombay Stock Exchange’s Sensex and National Stock Exchange’s Nifty declined by 1687.9 points and 509.8 percent respectively, down 3 percent over the previous close.

The decline, which was so far 9 percent from its peak before Friday, continued its downward journey due to weak global cues, persistent selling by foreign institutional investors and premium valuation apart from fears or re-emerging COVID-19 virus in certain parts of the world.

“The bears were in control from the beginning as a new variant of COVID-19 raised concerns globally and they further tightened their grip as the session progressed. Selling pressure was widespread and all sectors barring pharma ended with deep cuts,” said Ajit Mishra, vice president of the Research at Religare Broking Ltd., another domestic brokerage house.

The way markets have closed on Friday, we expect more pain in the coming sessions, Mishra said.