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Market Today: The frontline equity indices on the BSE and National Stock Exchange (NSE) crashed 1.4 per cent on Monday tracking weakness in the global markets that fell after the head of the US Federal Reserve indicated high-interest rates will continue for some time to curb inflation.
The S&P BSE Sensex crashed 861.25 points (1.46 per cent) to end at 57,972.62, while the Nifty 50 settled at 17,312.90, down 246.00 points (1.40 per cent). Both the indices had opened over 2 per cent lower earlier in the day and slipped nearly 2.5 per cent in early deals with the Sensex hitting an intraday low of 57,367.47 and the broader Nifty touching 17,166.20.
On the Sensex pack, the losses on Monday were led by IT stocks – Tech Mahindra, Infosys, Wipro, HCL Technologies and Tata Consultancy Services (TCS). Apart from these, Kotak Mahindra Bank, Tata Steel, Axis Bank, ICICI Bank, State Bank of India (SBI) and HDFC Bank were also among the laggards. In contrast, Maruti Suzuki India, Asian Paints, Nestle India, ITC, Mahindra & Mahindra (M&M) and Hindustan Unilever ended higher.
Among the sectoral indices, the Nifty IT index crashed 3.53 per cent, Nifty Media fell 2.03 per cent, Bank Nifty declined 1.82 per cent and Nifty Financial Services slipped 1.69 per cent.
In the broader market, the S&P BSE MidCap index ended at 24,917.29, down 201.71 points (0.80 per cent) while the S&P BSE SmallCap settled at 28,254.99, down 160.90 points (0.57 per cent). The volatility index on NSE or India VIX surged 8.82 per cent to 19.82.
“Powell’s hawkish tone during the Jackson Hole symposium pointed towards a stricter rate hike while investors were expecting a milder policy action post the release of the softer July inflation reading. This has increased concern about an economic slowdown, which has caused a significant sell-off in the US market and spillover effects on markets around the world. The sell-off in emerging markets like India was exacerbated by concerns over the possible withdrawal of foreign funds, which was the backbone of the recent market rally,” said Vinod Nair, Head of Research at Geojit Financial Services.
After hitting all-time low, the rupee recovered some of its losses to settle 10 paise down at 79.94 (provisional) against the US dollar on Monday, tracking the strength of the American currency and firm crude oil prices.
At the interbank foreign exchange market, the local currency opened at 80.10 and fell to its all-time low of 80.15 against the US dollar in intra-day trade. The local unit finally settled at 79.94 a dollar, down 10 paise over its previous close of 79.84.
Global shares declined Monday after the chairman of the US Federal Reserve indicated high-interest rates will continue for some time to curb inflation.
The fall in Asian and European markets followed a drop on Wall Street, where the Dow Jones Industrial Average ended the week down more than 1,000 points. France’s CAC 40 dropped 1.4 per cent in early trading to 6,186.58, while Germany’s DAX lost 1.3 per cent to 12,802.11. Britain’s FTSE 100 shed 0.7 per cent to 7,427.31. US shares were set to drift lower, with Dow futures down 0.7 per cent at 32,049.00. S&P 500 futures fell 0.8 per cent to 4,026.50.
Japan’s benchmark Nikkei 225 dipped 2.7 per cent to finish at 27,878.96. Australia’s S&P/ASX 200 dropped 2.0 per cent to 6,965.50. South Korea’s Kospi slipped 2.2 per cent to 2,426.89. Hong Kong’s Hang Seng slid 0.7 per cent to 20,023.22, while the Shanghai Composite recouped earlier losses and edged up 0.1 per cent to 3,240.73.
(with rupee and global market inputs from PTI and AP)
