Extending losses for the fifth session in a row, the benchmark BSE Sensex on Monday fell below the 33,000-mark to extend its slide for the fifth straight session amid worries over widening current account deficit and possible rate hike by the US Federal Reserve. The rupee also declined by 23 paise against the dollar.
The 30-share index closed down 252.88 points or 0.76 per cent at 32,923.12 — the weakest closing since December 6 last when it settled at 32,597.18. The index had lost 741.94 points in the previous four sessions. The broader NSE Nifty too fell below the 10,100 level by dropping 100.10 points to end at 10,094.25 due to foreign fund outflows amid rising bond yields on prospects of a 25 basis point hike in interest rate by the US Federal reserve this week.
The rupee plunged by 23 paise to close at one-week low of 65.17 against the US currency due to concerns over widening current account deficit and a strong dollar ahead of a crucial US Federal Reserve meet.
Dealers said the overall market sentiment remained weak after the RBI data released on Friday showed current account deficit (CAD) rising to 2 per cent of the GDP at $ 13.5 billion in the December quarter, up from 1.4 per cent in the year-ago period, due to a higher trade deficit.
Global cues too were weak as investors moved cautiously before the US Federal Reserve meeting, that is likely to raise US interest rates. “Market continues to drag under global market volatility ahead of the FOMC meet tomorrow, where consensus hints at a 25bps rate hike. Bond yield remains at elevated levels and concern on trade tensions is influencing investors to book profit. Back home, rupee weakened due to widening current account deficit and led investors to remain cautious,” Vinod Nair, Head of Research, Geojit Financial Services Ltd said.
Tata Steel was the biggest loser among Sensex components, plunging by 4.24 per cent, followed by Bharti Airtel at 4.16 per cent. Metal stocks bore the brunt after prices of base metals dropped in global markets. Chinese ore fell to its lowest level since November on high inventories. In the metal segment, counters such as NMDC, SAIL, Hindalco, JSW Steel, Jindal Steel and Power, Hindustan Zinc and Vedanta fell up to 6.47 per cent. State-run oil marketing companies such as IOC and BPCL fell on reports that refiners may buy stake in GAIL. BPCL, HPCL and IOC declined up to 4.01 per cent.
Among sectoral indices, the BSE telecom index emerged the worst performer by falling 3.40 per cent, followed by realty (3.01 per cent) and metal (2.65 per cent). The small-cap index declined by 1.98 per cent, while mid-cap index eased 1.58 per cent.
Japan’s Nikkei was down 0.90 per cent, Singapore fell 0.39 per cent, while Hong Kong’s Hang Seng was up 0.04 per cent. Shanghai Composite Index edged higher by 0.29 per cent. In the Eurozone, Frankfurt’s DAX was lower by 1.05 per cent, while Paris CAC 40 fell 0.82 per cent in their early deals. London’s FTSE too was down 1.09 per cent.
Jayant Manglik, president, Religare Broking, said, “Almost all the sectoral indices traded in line with the benchmark index … Weak global cues and caution ahead of the FOMC meet were weighing on the sentiment.”