Sensex plunges 330 pts in late selloff on Moody’s outlook downgrade

Mumbai: BSE benchmark Sensex dropped 330 points on Friday after rating agency Moody’s Investors Service downgraded India’s outlook to ‘negative’ from stable’ and fresh concerns over US-China trade deal.

The ratings agency downgraded India’s outlook on concerns that country's economic growth will remain materially lower than in the past.

In late afternoon announcement, Moody’s also cut outlook on 21 top Indian companies, including SBI, HDFC Bank, TCS, Infosys, BPCL, NHAI and GAIL.

Meanwhile, an agreement between the US and China to roll back existing tariffs as part of a ‘phase one’ trade deal faced fierce internal opposition at the White House and from outside advisers, Reuters reported, citing multiple sources familiar with the talks.

Market at a glance
BSE Sensex closed 0.81 per cent or 330.13 points lower at 40,323.61, while NSE Nifty shed 0.86 per cent or 103.90 points to 11,908.15.

For the week, Sensex gained 0.4 per cent, while Nifty gained 0.14 per cent.

The bears overpowered the bulls as declining shares beat advancing shares in a ratio of 1.4:1 on the BSE.

BSE FMCG and Metal indices led the losers’ pack. They fell 1.78 per cent and 1.77 per cent, respectively.

As many as 24 out of 30 Sensex stocks closed lower. IT stocks led the decline for Sensex pack. The country’s largest software services exporter Tata Consultancy Services (TCS) contributed the most – 56.63 points to Sensex’s losses, as it dropped 2.54 per cent. Peer Infosys contributed 41.69 points, as it fell 1.60 per cent.

Gain in financials limited the losses.

Private lender YES Bank bucked the trend and rallied 3.76 per cent. Top private sector lender ICICI Bank advanced 2.25 percent, while peers IndusInd Bank and Kotak Mahindra Bank rose 3.08 per cent and 0.92 per cent, respectively.

Analysts’ View
"Nifty closed on a flattish note, forming Doji star candle pattern on the weekly chart and evening star kind of candle pattern on daily chart, hinting a negative reversal if it manages to sustain below the lows of the current week. The index showed profit booking from strong resistance in 12,000-12,025, hinting we may see some more cuts if index continued to trade below its immediate resistance of 11,950" -- Rohit Singre, Senior Technical Analyst at LKP Securities.

Global markets
European shares opened lower on Friday halting a week-long rally, while Asian stocks retreated from six-month highs after mixed signals on US-China trade left investors uncertain on whether the two sides are really getting close to signing a deal, Reuters reported.

The pan-European STOXX 600 index fell 0.4 per cent at 0807 GMT, but was still set to end its fifth straight week in the black. MSCI’s gauge of Asia-Pacific shares outside Japan was off 0.2 per cent.