Indian stock market gauges Sensex and Nifty logged their first drop in five sessions on Wednesday in line with tepid global bourses and the rupee plunged further to touch the historic 79-level for the first time ever as inflation and recession fears continued to hurt sentiment.
The pullback rally witnessed in the equity market has lost steam and the rupee has been battered by unabated foreign money outflows and elevated crude prices. The decline in commodity prices last week has not sustained and Brent crude is back to above $117.
The Sensex opened gap-down and touched the day’s lowest level at 52,612 before making some recovery in the afternoon session. The 30-share index finally closed at 53,027, showing a loss of 150 points or 0.28 percent.
Likewise, the NSE Nifty fell 51 points or 0.32 percent to settle at 15,799.
On the Sensex chart, HUL, Axis Bank, Bajaj FinServ, Wipro, HCL Tech and Kotak Mahindra Bank were major laggards – falling as much as 3.63 percent.
On the other hand, NTPC, Reliance, Sun Pharma, Ultratech Cement and ITC were major gainers.
The Sensex breadth was in favour of sellers as 20 shares closed in the red.
Broader largecap, midcap and smallcap too followed the benchmark to end in the negative zone, losing 0.40 percent, 0.83 percent and 0.21 percent respectively.
Sectorally, BSE bank, FMCG and finance indices were major losers, dropping up to 1.34 percent.
In contrast, BSE Utilities and power indices logged over 1 percent gains.
Here are some of the key highlights from the financial markets:
Rupee hits 79-level against USD:
The Indian rupee plunged to a new life-time low of 79.05 against the US dollar, a drop of 18 paise. In the previous session, the domestic currency closed at 78.85 a dollar.
Unabated foreign fund outflows and resurgence in crude oil prices have kept rupee under pressure for several months.
Continuing their selling spree, foreign institutional investors sold equities worth Rs 1,244.44 crore on a net basis on Tuesday.
Global shares weaken on recession worries:
Global stock markets fell for the second straight day on Wednesday and bond yields inched lower on growing fears that central banks‘ measures to rein in inflation will push economies into recession.
Asian stock markets fell on Wednesday, extending Wall Street’s overnight losses amid concerns over inflation and the possibility of recession, which also boosted the safe-haven dollar.
US equities gave up early gains and ended lower as markets are worried about global inflation and the pace of tighten monetary policy in the near future. Consumer index indicates falling consumer confidence and increasing fear of inflation at the end of year.
The Dow Jones dropped 1.6 percent, the S&P 500 lost 2 percent, while the Nasdaq fell 3 percent. 10-year US Treasury note advanced to 3.21 percent, from 3.19 percent.
The consumers’ short-term outlook for the US economy dropped sharply to its lowest point in nearly a decade, says Mitul Shah, Head Of Research at Reliance Securities.
Bullion prices soften:
Internationally, gold fell in range-bound trading on Wednesday as prospects of elevated interest rates continued to override its safe-haven appeal to some extent despite looming recession risks.
Spot gold fell 0.2 percent to $1,817.00 per ounce, holding a tight range between $1,814.30 – $1,822.76. US gold futures were down 0.2 percent to $1,817.60.
Crude oil prices surge:
Global crude oil prices gained for a fourth straight session on Wednesday with tight supply worries offsetting concerns about a weaker global economy.
Brent crude futures for August were little changed at $117.9 a barrel. The August contract will expire on Thursday and the more-active September contract was at $114.06, up 23 cents, or 0.2 percent.
US West Texas Intermediate (WTI) crude futures were up 44 cents, or 0.4 percent, to $112.20 a bar-rel.
