Sensex closes near six-month low amid demonetisation worries

The 30-share S&P BSE Sensex closed lower by 71 points, or 0.27%, to 26,227.62, and the Nifty 50 falls 31.65 points, or 0.39%, to 8,079.95

IT stocks fell on Thursday after Nasscom lowered its projections of IT exports. Photo: Mint
IT stocks fell on Thursday after Nasscom lowered its projections of IT exports. Photo: Mint

Mumbai: The benchmark Sensex fell over 71 points in choppy trade on Thursday to a near six-month low level of 26,228, falling for the fourth straight session, amid lingering worries about the economic impact of demonetization. The Nifty too dipped below the key 8,100-level. Sentiment also took a hit on sustained foreign capital outflow from emerging markets, including India, and the dollar climbing to its highest mark in over 13 years.

Trading sentiment remained distinctly weak due to cash crunch arising out of the government’s move to demonetise Rs500 and Rs1,000 notes to flush out black money amid concerns about its impact on small and medium-sized businesses which largely run on cash. After opening a shade higher at 26,304.90, the Sensex advanced to the day’s high of 26,449.87, largely on bargain-buying by participants, including sustained pumping of funds by domestic financial institutions.

“Overall, the general market sentiment is down as investors remain wary and we can see some discretionary spending taking place due to demonetization,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities as quoted by Reuters. “While gains on the indexes right now will be short term, one can expect selling to resume soon,” added Jain.

However, it turned volatile largely in tandem with overseas markets and slipped into negative terrain to hit a low of 26,155.40 before settling 71.07 points, or 0.27% lower at 26,227.62, a level last seen on 25 May this year. The Nifty, after shuttling between 8,151.25 and 8,060.30, concluded 31.65 points or 0.39% down at 8,079.95, a level last seen on 26 May, when it closed at 8,069.65.

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