With the negative sentiment in local equities that prevailed for almost the entire trading session at Dalal Street, the market worsened towards the fag-end on the back of across-the-board selling pressure. The Sensex on a fifth straight session on Tuesday slipped by 220 points, plunging to a three-month low due to some political concerns in the country.
However, analysts felt that investors turned cagey and fear the National Herald case could hurt the prospects of the passage of the GST Bill in this session of Parliament. “Further, growing concerns that GST in its present form may not be the panacea that industry has been long expecting, is also keeping investors cautious,” said Anand James Co Head Technical Research Desk at Geojit BNP Paribas.
The market’s bearish hug with the investors pushed oil & gas companies into the negative zone, following a big hit in the whole trading session. Global oil also struggled at a seven-year low as OPEC and decided not to slash output. Consequently, BSE oil &gas index plunged by 2.14 per cent. GAIl was the worst performer from the 30-share Sensex pack, followed by Vedanta, Hindalco, Tata Steel and ONGC. local commodity stocks also bore the major brunt after global oil prices plunged 6 per cent to its lowest level of the year. Besides, sustained foreign funds outflows and weakness in the rupee spoiled the market mood.
Meanwhile, the rupee on Tuesday plunged 11 paise at 66.84 to its fresh two-year low against the US dollar on consistent demand for the American currency from banks and importers. Extreme volatility in domestic equities as well as expectations that the Federal Reserve is on track to raise interest rates for the first time since 2006 predominantly impacted the rupee sentiment.
The domestic currency opened substantially lower at 66.85 per dollar from overnight closing level of 66.73 at the Interbank Foreign Exchange due to strong dollar demand in the wake of sustained foreign capital outflows.
As far as domestic market is concerned the 30-share Sensex, after shuttling between 25,256.79 and 25,542.47, ended the day down by 219.78 points or 0.86 per cent at over three-month low of 25,310.33. The index had closed at 24,893.81 points on September 7.
With Tuesday’s 220-point drop, the 30-share barometer has shed around 860 points in the last five sessions. The broad-based NSE Nifty after dipping below the crucial 7,700-mark to touch a low of 7,685.45, settled 63.70 points or 0.82 per cent down at 7,701.70.
With a slump of over 5 per cent, GAIl was the biggest loser among Sensex and Nifty stocks as the company mulls shutting down of coal-based power plants near metro cities. Other laggards included Vedanta, Hindalco, Dr Reddy’s, ONGC, Tata Steel, Coal India, BHEl, l&T, RIl, SBI, lupin, Wipro, lupin, M&M, HDFC, Hero MotoCorp, HUl, Sun Pharma, ICICI Bank, Axis Bank, Bharti Airtel, Cipla and Maruti Suzuki.
However, shares of Tata Motors, Bajaj Auto, ITC and TCS ended in the positive zone. In broader markets, the small-cap index shed 1.33 per cent and mid-cap slipped 1.17 per cent. Global cues were also depressed as stocks took a beating after Chinese data on imports and exports reinforced worries about the health of economy at the same time as US considers raising interest rates.
Key indices in Asia, like China, Hong Kong, Japan, South Korea, Singapore and Taiwan moved down by 0.75-1.89 per cent. The key indices in Europe, like France, Germany and the UK fell by 0.64 per cent to 0.80 per cent.