BSE bechmark tanked 604 points to 28,844.78 and Nifty index tumbled 181 points to 8,756.75 on massive selling in line with global markets on fears of an earlier-than-expected US interest rate hike. After US labour Department said unemployment fell to 5.5 per cent in February, the lowest level since May 2008, speculation was triggered that the US Federal Reserve will lift rates from near-zero as early as summer, say brokers.
If the US Fed hikes rates earlier than markets estimated, emerging countries like India may be hit. Rupee’s plunge too kept the market on a shaky ground. After a gap-down opening, key indices kept falling as key supported levels triggered fresh short-selling, say brokers. Rich valuations after recent record breaking rally and lack of definite cues with two major events - the Union Budget and the much awaited rate cut by the RBI out of the way, domestic investors preferred booking profits, they added.
The Sensex opened at 29,316.54 and fluctuated between a high of 29,321.06 and a low of 28,799.76 before concluding at 28,844.78, a massive fall of 604.17 points, or 2.05 per cent over last close. Previously, it had plunged by 854.86 points or 3.07 per cent on January 6, 2015.It was a sea of red in domestic markets today. Nearly 1900 shares on the BSE fell while less than 1,000 managed to rise.
“There are concerns over liquidity flows into India and other emerging markets, when US actually increases interest rates,” said Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities. Banking, power, capital goods, realty, metal, IT, oil&gas, auto and FMCG shares reported sharp losses. The NSE index, CNX Nifty also plummeted by a massive 181 points, or 2.03 per cent to end at 8,756.75 after touching a intra-day low of 8,740.45. This was also its worst daily drop since January 6 when it slid by 251 points.
Elsewhere in the region, barring Shanghai Composite which rallied on the back of strong export data, most equities remained under intense selling pressure with key indices in Hong Kong, Japan, Singapore and Taiwan ending lower. Europe too was trading lower in late morning deals. France’s CAC was down by 0.76 per cent, Germany’s DAX by 0.38 per cent and the UK’s FTSE by 1.42 per cent on the back of fall on Wall Street last weekend. The severe bout of selling pressure that engulfed themarket took a heavy toll of all sectoral indices with Bankex plunging by 3.01 per cent. It followed by power 2.94 per cent, Capital Goods 2.74 per cent, Realty 2.58 per cent, Metal 2.40 per cent, IT 2.06 per cent, Oil & Gas 1.67 per cent, Auto 1.08 and FMCG 0.74 per cent.
However, Healthcare bucked the trend and gained by 0.30 per cent. In the 30-share Sensex pack, 26 scrips ended with heavy losses, while remaining 4 ended higher. The total market breadth remained weak as 1,889 stocks ended in negative terrain, 977 ended in positive while 107 ruled stable. Major laggards included Sesa Sterlite that tumbled by (5.21 per cent) Hindalco (4.70 per cent), BHEl (4.55 per cent) GAIl (4.52 per cent), ICICI Bank (4.33 per cent), Axis Bank (4.05 per cent) NTPC (3.74 per cent), Tata Power (3.52 per cent), l&T 3.43 per cent) and Infosys (2.72 per cent).
“On another global front, the European Central Bank (ECB) is set to begin its long-awaited 1.1 trillion euro (USD 1.2 trillion) quantitative easing programme from March 9, to stimulate growth and ward off deflation across the eurozone. Its impact on Indian markets should be keenly watched,” said Jayant Manglik, President-retail distribution, Religare Securities. The gainers today included HUl which rose by 3.76 per cent, Dr Reddy 0.58 per cent, Sun Pharma 0.41 per cent and Maruti Suzuki by a mere 0.01 per cent. The total turnover on the BSE jumped to Rs4,610.46 crore as compared to Rs3,647.8 crore last Thursday.