Sensex Ends 167 Points Lower; Metal and Realty Stocks Witness Huge Selling

Fri, 27 Sep Closing | Monish Vora, TM Team

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India share markets witnessed selling pressure during closing hours and ended their day deep in the red.

At the closing bell, the BSE Sensex stood lower by 167 points (down 0.4%) and the NSE Nifty closed down by 58 points (down 0.5%).

The BSE Mid Cap index ended the day down 0.6%, while the BSE Small Cap index ended the day down 0.8%.

Barring telecom stocks, all sectoral indices ended on a negative note with stocks in the metal sector and realty sector witnessing most of the selling pressure.

The rupee was trading at 70.67 against the US$.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was down by 0.33% and the Shanghai Composite was up by 0.11%. The Nikkei 225 was down 0.77%.

European markets were trading on a positive note. The FTSE 100 was up by 1.07%. The DAX was trading up by 0.77%, while the CAC 40 was up by 0.30%.

Speaking of Indian share market in general, if you look at the stock market returns over the years, you will see that the markets have never moved in a linear fashion.

What do I mean by that?

It has never been a one-way street - only up or down.

Stock markets have always moved in cycles.

The Time to Buy Stocks is Now

Here's what Radhika Pandit wrote about this in a recent edition of The 5 Minute WrapUp...

• If you would have bought stocks when either the Sensex or the Smallcap index was in a downturn, you would have made big returns once the cycle turned and the bulls took over.
  
  Sarvajeet and I believe we are seeing a similar situation currently.
  
  The economic slowdown does not herald the end of the world or for that matter the end of India. It's a phase and like all phases - This too shall pass.

So, the real question is - Are you taking advantage of these price declines to buy quality stocks?

Watch Now: 3 Little-known Stocks We are Super Bullish On

In the news from the automobile sector, Tata Motors share price was in focus today. The stock of the company witnessed selling pressure on reports of company shutting Jaguar Land Rover (JLR) plant for a week in the United Kingdom.

As per the news, the Tata Motors-subsidiary will suspend the operations to adjust to adverse market conditions, including uncertainty over Brexit.

A company official said that JLR would suspend production at all UK manufacturing plants for one week, commencing November 4, 2019. Tata Motors-owned automaker has three manufacturing plants in the UK at Halewood, Solihull and Castle Bromwich.

Note that the stock of Tata Motors has lost more than 45% during the last one year and fallen around 30% since the beginning of this year.

How this development affects the company remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

In the news from the commodity space, the International Energy Agency (IEA) may cut its growth estimates for global oil demand for 2019 and 2020 if the global economy weakens further.

The Paris-based agency trimmed in August its global oil demand growth estimates for 2019 and 2020 to 1.1 million and 1.3 million barrels per day (bpd), respectively, as trade woes weighed on global oil consumption, making demand grow at its slowest pace since the financial crisis of 2008.

The chief of the agency noted that it will depend on the global economy. If the global economy weakens, for which there are already some signs we may lower oil demand expectations.

He said China's economic growth, which has fallen to the lowest in nearly three decades, could also mean there would be some revisions, as Beijing is an engine of the demand growth.

Asked about how Asian importers could increase their energy security in the midst of heightened tensions in the Middle East, he said diversifying oil and natural gas imports as much as possible is a way to cope with geopolitical risks.

Also, speaking of crude oil, prices witnessed selling pressure as the rapid return of production capacity from the world's top exporter squashed risk premiums.

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Prices were also pressured by worries of weak global economic growth and its effect on oil demand.

Saudi Arabia had brought its production capacity back to 11.3 million barrels per day (bpd) less than two weeks after the attacks on its oil facilities.

The attacks, which knocked out 5.7 million bpd of production, initially sent oil prices up 20% although they dropped soon after as the kingdom pledged to bring back output by the end of September.

A surprise 2.4 million-barrel build in US crude inventories last week also weighed on prices.

How this pans out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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