Sensex logs worst week in 15 months on interest rate worries
Advertisement

Sensex logs worst week in 15 months on interest rate worries

By Reuters

  • 22 Sep 2023
Sensex logs worst week in 15 months on interest rate worries
Credit: Reuters

Indian shares closed lower on Friday, with the benchmark Sensex logging its worst week in over 15 months on lingering worries over a higher global interest rate environment following the U.S. Federal Reserve's hawkish tone.

The main Nifty 50 index closed down 0.34% at 19,674.25 points, while the S&P BSE Sensex fell 0.33% to 66,009.15 points. Both the indexes hit their all-time highs last week.

The Sensex recorded its worst since June 2022, with a 2.7% fall. Meanwhile, the Nifty 50 index posted its worst week since February.

Advertisement

"We are seeing some consolidation in the market after the benchmark indexes surged to all-time highs and global markets are weaker," said Ajit Mishra, senior vice president for research at Religare Broking.

Higher interest rates dry up liquidity from the markets, increasing the cost of capital. Foreign investors have been net sellers so far this month, offloading shares worth $996.2 million as of Sept. 20, as per National Securities Depository Ltd data.

Foreign inflows into Indian equities were $15.45 billion this year, compared with $16.5 billion of outflows last year, as per LSEG data.

Advertisement

Pharma stocks fell 1.6%, making them the biggest laggards, as investors booked profits following their more than 19% rise this year, analysts said.

Public sector banks were top gainers among the sectors, rising 3.5%.

In a high interest-rate environment, investors prefer to buy value stocks that offer higher dividend yield and are available at "comfortable" valuations, said Saurabh Jain, assistant vice president of research at SMC Securities.

Advertisement

Domestically focussed mid-caps were down 0.1%, while small-caps added 0.3%.

Among individual stocks, drugmaker Glenmark Pharmaceuticals fell 3% after selling a majority stake in its life sciences unit. Knitted garments maker Lux Industries dropped 3% after the income tax department conducted raids at its premises.

Advertisement

Share article on

Advertisement
Advertisement
Google News Icon

Google News

Follow VCCircle on Google News for the latest updates on Business and Startup News