India’s benchmark Sensex on Tuesday plunged 206 points while the broader Nifty closed below the 9,400-mark as investors booked profits amid volatile global cues in the aftermath of a terror attack in the UK. The rupee also took a hefty knock after a brief two-day recovery against the US currency and slumped by 34 paise to end at a fresh seven-week low of 64.89 on the back of frantic dollar demand.
This is the lowest closing for the home currency since April 3, when it had closed at 65.03 against the greenback. Heavy month-end dollar demand along with sustained foreign capital outflows also weighed on the forex trade. The local unit resumed substantially weak at 64.64 from overnight closing value of 64.55. It declined under intense dollar pressure to hit an intra-day low of 64.90 in late afternoon deals before concluding the day at 64.89, revealing a steep loss of 34 paise, or 0.53 per cent.
The rupee had strengthened 29 paise in the last two sessions after taking a battering last week.
Rising political uncertainty in the US and Wednesday’s key Fed monetary policy meeting minutes, which would provide clues over the central bank’s next rate hike decision, further added pressure on the rupee trade. Overall forex trading sentiment was overshadowed by the news of a deadly blast in the UK city of Manchester which is suspected to have been a terror attack.
Foreign funds offloaded shares worth Rs 321.17 crore on Monday as per the provisional stock exchanges data.
The 30-share Sensex resumed lower at 30,553.89 and hovered in a range of 30,610.84 and 30,316.92 before settling at 30,365.25, showing a loss of 205.72 points, or 0.67 per cent. The index had gained 136.18 points in the previous two sessions. The NSE 50-share Nifty also tumbled 52.10 points or 0.55 per cent to 9,386.15, after shuttling between 9,448.05 and 9,370. Pharma index was the worst performer on both the BSE and the NSE after weak quarterly results of Sun Pharma’s overseas arm Taro Pharmaceuticals — seen as representative of the vast Indian generics business in the US — spooked investors.
Global cues were negative after at least 22 people were killed and 59 injured when a suicide bomber blew himself up in Manchester — the deadliest terror attack in the UK since the 7/7 bombings of 2005. Further, Indian Army carrying out fire assaults on Pakistani posts across the Line of Control (LoC) added to the grim mood, prompting participants to book profits in recent gainers, brokers said.
Investors were also cautious ahead of May series derivative contracts expiry on Thursday. “Investors were cautious due to sudden hike in Indo-Pak tension. Additionally, higher than expected GST rate especially for consumer oriented durables is impacting the market. Pharma continued to taste bitterness in earnings due to high competition which is impacting the sentiment of the sector for the long-term,” said Vinod Nair, Head of Research, Geojit Financial Services.
Pharma counters suffered massive selling, with Aurobindo Pharma falling 5.94 per cent, followed by Orchid Pharma (5.57 per cent), Cipla (4.89 per cent) and Morepen Lab (4.76 per cent) on BSE. Sun Pharma fell 4.33 per cent after its overseas arm Taro Pharmaceutical Industries reported weak earnings in the March quarter. Adani Ports was the worst performer in the Sensex pack, plunging 6.19 per cent to Rs 332.05. Among the BSE sectoral indices, healthcare was the top loser, declining 2.72 per cent, followed by realty 2.59 per cent, utilities 1.90 per cent, power 1.89 per cent, industrials 1.55 per cent, consumer durables 1.51 per cent, energy 1.48 per cent and capital goods 1.47 per cent.
In worldwide trade, the US dollar dipped against the basket of currencies as investor sentiment has been hit by fears that the US political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.