India's equity markets snapped three days of gains and ended sharply lower on Friday, with the benchmark Sensex closing almost one per cent lower, after a shock resignation by CEO and M.D. Vishal Sikka sent Infosys shares tumbling 10 per cent. Investors were also nervous following weakness in global markets on growing worries over whether US President Donald Trump would be able to push his economic agenda and the terror attack in Spain, which drove capital away from equities and into safe haven assets.
The BSE Sensex closed down 271 points or 0.9 per cent to 31,524.68 and the NSE Nifty 50 declined 67 points or 0.7 per cent to end at 9,837.40 points.
Infosys was among the biggest losers on Friday. The stock plunged 9.6 per cent after its CEO and MD Vishal Sikka resigned citing constant distractions and increasingly personal attacks. The news shaved off almost Rs 17,000 crore in the company's market capitalisation.
Pharmaceutical companies, banks and auto stocks were among the other notable losers on Friday.
“Market slid due to unprecedented exit of Infosys CEO which put investors and stakeholders in the doldrums. On the global front, investors were jittery on account of a terrorist attack in Europe which also dampened the sentiment,” said Vinod Nair, head of research at Geojit Financial Services.
Overseas, the Dow Jones Industrial Average slumped 1.2 per cent, its biggest single-day fall in three months. Several top business leaders resigned from Trump's business and manufacturing councils this week, raising doubts whether the president could carry through his business friendly policies.
The weakness, which also dampened by the terror attack in Barcelona, spread to Asia, where Japan's Nikkei Stock Average and Hong Kong's Hang Seng ended more than one per cent lower and most European stock markets were also down close to one per cent.
Despite the sharp fall today, India's equity markets ended the week in the green. Since's Friday's close, the Sensex rose one per cent and the Nifty 50 was up 1.30 per cent.
Analysts believe the sharp negative reaction to Infosys, which had a wider impact on the market, may not last long and markets may recover next week if there is some good news on the revival of monsoon.
After rising to a record level, market mood this month had turned somewhat cautious, particularly as the broader earnings recovery still doesn't seem to be in sight. So far in August, foreign portfolio investors have sold Rs 8,868 crore worth shares in the domestic market, although investment from local mutual funds has remained strong.
