Sensex Tanks 400 Points, Nifty Below 11,450
The domestic equity markets cracked as government's measures to stem the rupee fall failed to uplift investor sentiment. At the day's lowest point, the S&P BSE Sensex plunged 493 points lower to hit 37,597.05 and the Nifty50 shed 141 points to touch 11,373. At 12:16 pm, the Sensex traded at 37,695.60, down 395.04 points or 1.04 per cent and the Nifty50 was at 11,411.70, with a loss of 103.50 points or 0.90 per cent. Thirty six out of 50 Nifty stocks declined in trade. The top Sensex losers were HDFC, Reliance Industries, NTPC, State Bank of India and Axis Bank, which lost between 1.5 and 2.1 per cent.
The Nifty PSU Bank index was down 1.4 per cent, Nifty Bank 1.2 per cent and Nifty Financial Services 1.5 per cent.
IT stocks, were however, were positive with a gain of 0.31 per cent on weak rupee. The rupee traded 81 paise lower at 72.65, thus breaching the 72 mark again against the US dollar. Weakness in the rupee boosts profitability for exporters such as IT companies.
A report by news agency Press Trust of India quoted brokers as saying that investors turned cautious and logged gains after the recent market rally. Besides, weakness in the rupee and a negative trend in most other Asian markets also weighed on the sentiments here, they added.
Over the weekend, the government decided to cut down non-essential imports, increase exports and put restrictions on masala bonds. Finance Minister Arun Jaitley was also confident that the government will meet its fiscal deficit target for financial year 2019.
However, analysts doubted if these steps would prevent the rupee's declines.
"There were expectations that something substantial will be planned to hold the rupee, but the measures the government had in hand were limited and a little long term in nature. So they will take their own time to have an impact," Naveen Kulkarni, head of research at Reliance Securities, was quoted as saying in a report by news agency Reuters.
Technical experts expect weakness in the markets to stay. "The key benchmark index Nifty is unfolded into the corrective pattern where 11,200 can be seen as first line of defence in the proximity of intermediate trend line," said Dyaneshwar Padwal, AVP technical analyst, KIFS Trade Capital.
Most Asian share markets slipped amid reports Washington was about to announce a new round of tariffs on Chinese imports, setting the stage for possible reprisals by Beijing, reported Reuters. MSCI's broadest index of Asia Pacific shares outside Japan dropped 1 per cent, snapping three straight sessions of gains.
In commodities market, Brent crude oil futures pulled back on reports of additional tariffs, dropping 9 cents a barrel to settle at $78.09.
On Friday, the Sensex had closed 372 points higher at 38,090 and the Nifty had risen 145 points to settle at 11,515.
According to provisional data available on the NSE, foreign portfolio investors and domestic institutional investors purchased net equities of Rs 1,090.56 crore and Rs 115.14 crore respectively on Friday. (With agencies inputs)
