Sensex down 700 pts, at 81,500, Nifty tests 25,000; Financials drag

Indian benchmark indices BSE Sensex and Nifty 50 dropped on Friday, as market watchers indicated that investors were likely booking profits at record levels before the release of US jobs and payrolls data later in the day in the US.

At 12:00 PM, the BSE Sensex was at 81,385, down 816 points, or 0.99 per cent, while the Nifty 50 was at 24,917, down 228 points, or 0.91 per cent.

Meanwhile, markets in Asia-Pacific mostly fell as investors digested household spending data from Japan.

Japan’s household spending data for July rose 0.1 per cent in real terms from the previous year, which led the country’s

benchmark Nikkei 225 to start the day marginally below the flatline, while the broad-based Topix started 0.42 per cent lower.

South Korea’s Kospi was down 0.8 per cent, and small cap Kosdaq was down 1.41 per cent. In contrast, Australia’s S&P/ASX 200 had climbed 0.14 per cent.

Hong Kong’s Hang Seng index futures were at 17,431, lower than the HSI’s last close of 17,444.3 and mainland China’s CSI 300 futures were at 3,254, marginally lower than the last close of 3,257.76.

That apart, MSCI’s global equities index edged down on Thursday as investors digested mixed economic data while awaiting Friday’s crucial US jobs report. Oil prices held near 14-month lows as demand worries offset draws on inventories.

Thursday’s data showed US private employers hired the fewest workers in three and a half years in August while the July number was revised lower, potentially hinting at a sharp labour market slowdown.

Thursday’s data also showed steady US services sector activity in August with the Institute for Supply Management’s non-manufacturing purchasing managers index at 51.5 last month compared to 51.4 in July.

But while the services data appeared to encourage traders earlier in the US trading session, stock indexes lost steam as the day wore on and investors braced for Friday’s data.

On Wall Street, the Dow Jones Industrial Average fell 219.22 points, or 0.54 per cent, to 40,755.75, the S&P 500 lost 16.66 points, or 0.30 per cent, to 5,503.41 and the Nasdaq Composite gained 43.37 points, or 0.25 per cent, to 17,127.66.

MSCI’s gauge of stocks across the globe fell 1.79 points, or 0.22 per cent, to 813.26, showing its fourth straight day of declines. Earlier in the day, Europe’s STOXX 600 index had closed down 0.54 per cent.

In currencies, the dollar eased in a choppy session as investors prepared themselves for Friday’s US payrolls report.

In Treasuries, the yield on benchmark US 10-year notes fell 3.9 basis points to 3.729 per cent, from 3.768 per cent late on Wednesday, while the 30-year bond yield fell 4.7 basis points to 4.0207 per cent.

In energy markets, oil ended the session barely changed as worries about demand in the US and China and a likely rise in supplies out of Libya offset a big, bullish withdrawal from US inventories and a delay to output increases by OPEC+ producers.

US crude settled down 0.07 per cent or 5 cents at $69.15 a barrel for its lowest close since December for the second straight day. Brent crude closed at $72.69 per barrel, down 1 cent on the day for its lowest close since June 2023 for a third day in a row.

Gold prices gained as the US dollar and Treasury yields fell as signs the labour market was losing steam led investors to consider a super-sized rate cut from the Fed.

Spot gold added 0.85 per cent to $2,515.31 an ounce. US gold futures gained 0.57 per cent to $2,507.60 an ounce.