Market turmoil: Sensex plunges 306 points; rupee nears 18-month lowhttps://indianexpress.com/article/business/economy/market-turmoil-sensex-plunges-306-points-rupee-nears-18-month-low-5188887/

Market turmoil: Sensex plunges 306 points; rupee nears 18-month low

Yield on 10-year government bond maturing in 2028 shoots up to 7.85 per cent.

For the rupee, 68.42 is the lowest closing level since November 29, 2016, when it had ended at 68.65 a dollar. (Illustration: CR Sasikumar)

Hit by high fuel prices and renewed geopolitical concerns, the benchmark Sensex on Wednesday plummeted more than 306 points and the rupee hit a near 18-month low of 68.42 against the US dollar. The 30-share BSE Sensex, which opened higher at 34,656.63, witnessed selling pressure in afternoon trade. The sell-off suddenly picked up pace towards the end of the session, leading the index to the day’s low of 34,302.89. The benchmark finally ended at 34,344.91 — showing a loss of 306.33 points, or 0.88 per cent. This is its weakest closing since April 19, when the Sensex had finished at 34,427.29. Likewise, the 50-stock NSE barometer Nifty finished at 10,430.35, down 106.35 points, or 1.01 per cent. Intra-day, it shuttled between 10,417.80 and 10,533.55.

For the rupee, 68.42 is the lowest closing level since November 29, 2016, when it had ended at 68.65 a dollar. There were apprehensions on the fiscal front amid rising global crude prices that threaten to further raise India’s import bill. Also, domestic forex market sentiment succumbed to bouts of pressure on revival of fresh global trade war fears after the US President Donald Trump tempered optimism over the progress made in the recent US-China trade talks. Currency traders turned extremely cautious about possibility that the adverse US trade and monetary policy will have a substantial impact on the Indian economy.

Meanwhile, the yield on the benchmark 10-year government bond maturing in 2028 shot up to 7.85 per cent. “The market edged lower amid pessimism on global trade talks and below par fourth quarter earnings. Metals sank while PSU bank outperformed and prevented the market from nosediving further. Investors expect that the worst is over with regard to PSU banks NPAs with adequate provisions and expectation of recapitalisation from government. On the other hand, rupee continued to fall and the fear of inflationary pressure may lead the market to consolidate,” said Vinod Nair, head of research, Geojit Financial Services.

Jayant Manglik, president, Religare Broking, said, “broader market indices like BSE Midcap and Smallcap too ended with losses of 0.2 per cent and 0.5 per cent, respectively. Barring consumer durables and capital goods, all the other sectoral indices ended in red with oil & gas, metals, auto and telecom being the top loser. As regards the global markets, the Asian and European indices traded lower.”

Oil companies such as HPCL, BPCL, IOC, ONGC and OIL plunged on worries that the government may ask them to share the burden of higher petrol and diesel prices. Metal stocks were the session’s worst performers, led by Vedanta which lost 6.23 per cent after protests against its copper plant in Tuticorin turned violent, leading to nine deaths. A weakening rupee and lacklustre fourth quarter results further weighed on sentiment, brokers said. On the global front, markets were caught off-guard after Trump cast doubts over the proposed summit with North Korea and also expressed dissatisfaction with last week’s trade talks with China.