The equity benchmark Sensex on Thursday hit its lowest level in three months, crashing over 806 points to close below the 35,200-level as concerns over weakening rupee and rising crude oil prices spooked investors.
Similarly, the NSE Nifty cracked the 10,600-level by falling 259 points.
The rupee plunged to an all-time low (intra-day) of 73.81 to the US dollar and global crude oil prices touched a four-year high of USD 86 a barrel, triggering worries for India on the macro-economic front.
The weakness in other Asian markets and a lower opening of the European shares also added to negative sentiments on the domestic bourses.
“The strongest of businesses and the bluest of blue chips have cracked in the last couple of sessions, which highlights the prevailing negative sentiment and environment of pessimism. With the rupee hitting record low, crude prices moving northwards, increasing fears of a broadening current account deficit along with the liquidity worries led to another major fall in the indices...” said Devang Mehta, head of equity advisory at Centrum Wealth Management.
A sharp plunge mainly in healthcare, IT, oil&gas, banking and auto pulled the Sensex lower by 806.47 points, or 2.24%, to 35,169.16 points, extending losses for the second straight day. Intra-day, it hit a low of 35,022.12. This is the lowest closing since July 2 when the index had settled at 35,264.41. The gauge had lost 550.51 points on Wednesday on rupee woes coupled with surging crude oil prices and unabated foreign fund outflows.
In the process, more than Rs 5 lakh crore has been wiped out in the last two trading sessions from the overall investors’ wealth.
The 50-share NSE Nifty also cracked the 10,600-level by falling 259 points, or 2.39%, to close at 10,599.25 after hitting a low of 10,547.25.
Besides, traders have been cautious ahead of the outcome of the ongoing three-day RBI policy meet that began on Wednesday.
“Anxieties over the Reserve Bank of India (RBI) adopting an aggressive stance in its monetary policy due to a rise in inflationary pressure led to an erosion in investors’ risk appetite. With deteriorating macros, all eyes will now be on the second quarter earnings and how the current liquidity situation is addressed,” Mehta said.
Also, weak cues from other most Asian markets as high US yield and upbeat economic data led to fear that investors would move to the US, accelerating selling pace on the domestic bourses.
According to analysts, the equity benchmark indices have fallen nearly 10% from peak levels attained in August, led by weak domestic sentiments, global uncertainties, depreciating rupee and boiling crude oil prices. With rupee and crude oil showing no signs of stability, weakness is likely to continue in the coming sessions, analysts said.
The international benchmark Brent crude prices hit a four-year high of USD 86.10 a barrel while WTI at USD 76.23 a barrel.
Stocks of tyres, paint and chemical companies turned distinctly weak as crude oil surged to near four-year high. Crude is main raw material used by these industries.
Selling pressure was broad-based, while IT, teck, realty and oil & gas and auto stocks were the worst hit.
Foreign portfolio investors (FPIs) sold shares worth a net of Rs 1,550 crore, while domestic institutional investors (DIIs) made purchases to the tune of Rs 1,402 crore on Wednesday.
Reliance Industries emerged as the biggest loser in the Sensex pack with its shares plunging 7.03%, while Hero MotoCorp lost 5.45%. Other laggards were TCS 4.54%, Adani Ports 4.17%, ONGC 3.74%, Sun Pharma 3.70%, HDFC Bank 3.46%, Bajaj Auto 3.04%, IndusInd Bank 3.03%, HUL 2.97%, Bharti Airtel 2.95%, ITC Ltd 2.49%, Kotak Bank 1.93%, Asian Paint 1.90%, Tata Motors 1.89%, Coal India 1.61%, HDFC Ltd 1.33%, Maruti Suzuki 0.80% and SBI 0.69 per cent. Also, Wipro, NTPC and PowerGrid fell up to 0.08%.
Among winners, ICICI Bank was the top performer, climbing 4.07%, followed by Axis Bank at 2.70%, L&T rose 1.18%, Yes Bank gained 1.08%, M&M was up 0.52% and Tata Steel added 0.38%.
Sectorwise, the BSE oil & gas index suffered the most by crashing 6.58%, followed by IT 3.28%, healthcare 3.02%, teck 2.97%, FMCG 2.56%, PSU 2.54 per cent and auto 1.84%.
Infrastructure, consumer durables, realty, power, metal, bankex and capital goods indices too ended lower by up to 1.74%.
The broader markets too continued to face heat with the the midcap and small-cap indices ending notably lower as investors indulged in trimming their portfolios in line with overall trends.
Elsewhere in Asia, Kong’s Hang Seng lost 1.73%, Japan’s Nikkei shed 0.56%, while Taiwan plunged 1.33%.
In the euro zone, Frankfurt’s DAX fell 0.39%, Paris CAC was down 0.90%, while London’s FTSE declined 0.85% in their early sessions.
