NEW DELHI: Equity indices fell sharply on Thursday with the benchmark BSE sensex plunging over 550 points amid heavy global sell-off as investors remained concerned over global economic slowdown.
Investor sentiment also tanked after chief economic adviser (CEA) Krishnamurthy Subramanian virtually ruled out a stimulus package from the government.
The 30-share index nosedived 587.44 points or 1.59 per cent to end at 36,472.93. While, the broader NSE Nifty moved 182.30 points or 1.67 per cent lower to settle at 10,736.40.
Yes Bank — which holds 12.79 per cent stake in CG Power and Industrial Solutions — was the biggest loser in the sensex pack, with its stock plunging as much as 12.16 per cent to Rs 56.30. The Gautam Thapar promoted CG Power is facing multiple probes, with the ministry of corporate affairs (MCA) ordering an investigation against the company, which on Tuesday announced that it had significantly understated its liabilities.
Vedanta, Bajaj Finance, Tata Motors, ONGC, SBI, Hero MotoCorp and ICICI Bank were the other losers in the 30-share index, with their stocks down as much as 7.76 per cent. Twenty six out of thirty stocks finished in red.
TechM, TCS, Hindustan Unilever and HCL Tech were the only gainers on the sensex, with their shares rising as much as 1.57 per cent.
On the NSE platform, except for Nifty IT which gained 0.23 per cent, all other sub-indices witnessed losses with Nifty Realty, Metal and PSU Bank sliding as much as 6.73 per cent.
Speaking at an event in Delhi, CEA Subramanian stressed on the cyclical nature of a market economy.
“Since 1991 we are a market economy, and in a market economy there are sectors which go on sunrise and then go through sunset phase.
“If we basically expect the government to use taxpayers’ money to intervene every time when there are some ‘sunsets’, then I think you introduce possible moral hazards from ‘too big to fail’ and as well as the possibility of a situation where profits are private and losses are socialized which is basically an anathema to way the market economy functions,” he said.
Speaking at the same event, power secretary Subhash Chandra Garg also said low interest rates and availability of credit to private sector are better tools than a fiscal stimulus.
Garg, who was finance secretary till last month, also said the first quarter GDP number are likely to be lower than the same period last fiscal.
The comments have dashed hopes of some sort of a stimulus package from the government to boost growth and revive flagging consumer sentiment, analysts said.
Globally, markets were jittery ahead of comments from Federal Reserve chair Jerome Powell at Jackson Hole, Wyoming, US.
Meanwhile, the Indian rupee depreciated 33 paise to 71.88 against the US dollar intra-day.
(With agency inputs)