Markets got a bear hug on Tuesday with Sensex crashing below 26,000-mark by tumbling 541 points and rupee slipping to test Rs66-level after Asian Development Bank lowered India’s growth forecast while steep losses in Europe and lingering growth concerns also weighed.
Consequently, the total market capitalisation of BSE-listed companies fell by Rs1.36 lakh crore to Rs93.33 lakh crore.
The NSE Nifty also dropped 165.10 points to 7,812.00 ahead of the September derivatives expiry on Thursday.
In currency market, the rupee lost 15 paise to settle at 65.88 against the dollar after hitting a low of Rs66 during intra-day on sustained demand from banks and importers on the back of higher dollar overseas.
Meanwhile, gold prices fell by Rs150 to Rs26,510 in the national capital.
“Indices slipped in deep red in line with European peers, China worries, profit-booking and unwinding of positions ahead of September derivative contracts expiry,” said Gaurav Jain Director of Hem Securities.
Brokers added that sentiment took a turn for the worse after ADB lowered its growth projections for India for 2015-16 to 7.4 per cent, from the 7.8 per cent earlier, citing weak monsoon, poor external demand and inability of the government to push reforms.
European market, which is under pressure after the US Fed’s decision to hold the rates, was lower with indexes in France, Germany and the UK tumbling by up to 3 per cent.
Offloading of bets by cautious investors ahead of the September derivatives expiry on Thursday, also weighed.
Selling pressure was broad-based, while metal stocks led by Vedanta, Hindalco and Tata Steel remained target of sellers and lost up to 6 per cent. Realty, bank, energy and capital goods stocks were among worst hit.