Mumbai: Indian stocks fell the most in over two months Monday with benchmark Sensex tanking 604 points to 28,844.78 and Nifty index tumbling 181 points to 8,756.75 on massive selling in line with global markets on fears of an earlier-than-expected US interest rate hike.
After US Labour Department said unemployment fell to 5.5 percent in February, the lowest level since May 2008, speculation was triggered that the US Federal Reserve will lift rates from near-zero as early as summer, say brokers.
If the US Fed hikes rates earlier than markets estimated, emerging countries like India may be hit. Rupee’s plunge too kept the market on a shaky ground.
After a gap-down opening, key indices kept falling as key supported levels triggered fresh short-selling, say brokers.
Rich valuations after recent record breaking rally and lack of definite cues with two major events – the Union Budget and the much awaited rate cut by the RBI out of the way, domestic investors preferred booking profits, they added.
The Sensex opened at 29,316.54 and fluctuated between a high of 29,321.06 and a low of 28,799.76 before concluding at 28,844.78, a massive fall of 604.17 points, or 2.05 percent over last close. Previously, it had plunged by 854.86 points or 3.07 percent on January 6, 2015.
It was a sea of red in domestic markets today. Nearly 1900 shares on the BSE fell while less than 1,000 managed to rise.
“There are concerns over liquidity flows into India and other emerging markets, when US actually increases interest rates,” said Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities.
Banking, power, capital goods, realty, metal, IT, oil&gas, auto and FMCG shares reported sharp losses.
The NSE index, CNX Nifty also plummeted by a massive 181 points, or 2.03 percent to end at 8,756.75 after touching a intra-day low of 8,740.45. This was also its worst daily drop since January 6 when it slid by 251 points.
Elsewhere in the region, barring Shanghai Composite which rallied on the back of strong export data, most equities remained under intense selling pressure with key indices in Hong Kong, Japan, Singapore and Taiwan ending lower.
Europe too was trading lower in late morning deals. France’s CAC was down by 0.76 percent, Germany’s DAX by 0.38 percent and the UK’s FTSE by 1.42 percent on the back of fall on Wall Street last weekend.
The severe bout of selling pressure that engulfed the market took a heavy toll of all sectoral indices with Bankex plunging by 3.01 percent. It followed by power 2.94 percent, Capital Goods 2.74 percent, Realty 2.58 percent, Metal 2.40 percent, IT 2.06 percent, Oil & Gas 1.67 percent, Auto 1.08 and FMCG 0.74 percent. However, Healthcare bucked the trend and gained by 0.30 percent.
In the 30-share Sensex pack, 26 scrips ended with heavy losses, while remaining 4 ended higher.
The total market breadth remained weak as 1,889 stocks ended in negative terrain, 977 ended in positive while 107 ruled stable.
Major laggards included Sesa Sterlite that tumbled by (5.21 percent) Hindalco (4.70 percent), BHEL (4.55 percent) GAIL (4.52 percent), ICICI Bank (4.33 percent), Axis Bank (4.05 percent) NTPC (3.74 percent), Tata Power (3.52 percent), L&T 3.43 percent) and Infosys (2.72 percent).
HDFC Bank (2.39 percent), ITC (2.21 percent), Tata Steel (2.04 percent), TCS (1.95 percent), Coal India (1.92 percent), M&M (1.84 percent), Reliance Industries (1.78 percent), HDFC (1.73 percent) and Wipro (1.29 percent) also fell. Besides, Bharti Airtel (1.25 percent), ONGC (1.16 percent), Tata Motors (1.12 percent) SBI (1.02 percent and Cipla (0.63 percent) witnessed moderate to heavy selling.
“On another global front, the European Central Bank (ECB) is set to begin its long-awaited 1.1 trillion euro (USD 1.2 trillion) quantitative easing programme from March 9, to stimulate growth and ward off deflation across the eurozone. Its impact on Indian markets should be keenly watched,” said Jayant Manglik, President-retail distribution, Religare Securities.
The gainers today included HUL which rose by 3.76 percent, Dr Reddy 0.58 percent, Sun Pharma 0.41 percent and Maruti Suzuki by a mere 0.01 percent.
The total turnover on the BSE jumped to Rs 4,610.46 crore as compared to Rs 3,647.8 crore last Thursday.