Stock market benchmark Sensex on Tuesday plunged nearly 624 points and the rupee plummeted by 62 paise to close at a near six-month low of 71.40 against the US dollar as trade war worries, Hong Kong protests and Argentine currency crash spooked financial markets. The sentiment was further dampened by domestic macro challenges, especially slowing economy and falling consumer demand in various sectors.
However, weathering the overall weak sentiment, shares of Reliance Industries (RIL) rallied nearly 10 per cent, thereby capping the Sensex loss to a large extent, analysts said.
The forex market, which was already battling against foreign fund outflows for some time, came under more pressure due to currency crisis in Argentina and global trade war concerns. Argentina s peso plunged on Monday after the country s centre-right leader Mauricio Macri performed poorly in primary elections. Continuing their bearish outlook, foreign investors sold Indian equities worth Rs 638.28 crore on a net basis on Tuesday, as per exchange data.
After plunging nearly 700 points in the fag-end of the session, the 30-share Sensex settled at 623.75 points, or 1.66 per cent, lower at 36,958.16. It hit an intra-day low of 36,888.49 and a high of 37,755.16. The 50-share Nifty fell 184.80 points to settle below the key 11,000-level at 10,925.85.
Markets eyeing govt steps for revival in economy
Financial markets were once again spooked by global and domestic woes. While trade war worries, Hong Kong protests and Argentine currency crash put pressure on the markets, investors remained jittery over domestic macro challenges, especially the slowdown in economy and falling consumer demand in various sectors like automobiles. Adding to the woes, foreign fund outflows continue as the government is yet to come out with any relief package for foreign investors. Markets are likely to witness further pressure unless the government comes out with strong measures and the economy shows signs of a revival.
Jagannadham Thunuguntla, head of research, Centrum Broking, said, Indian markets have been tagging along global markets in palpable risk-off sentiment due to multiple challenges of intensification of US-China trade war, sell-off in Argentina and Hong Kong markets. Despite good performance by Reliance stock on the back of pro-investor statements at its AGM, it couldn t save the day for Indian markets. Sell-off was all pervasive across the sectors fuelled by less-than-inspiring Indian corporate results and weakening rupee.
Market participants are eagerly awaiting any pro-market measures by Indian government post their extensive consultations with various stakeholders over previous week, he added.
Global crackdown due to political uncertainty in Argentina and Italy impacted our market. Domestic market is floating on a hope that government will come out with supportive measures as indicated in the meeting with FM. FPIs remained sellers as there were no reports on tax sops suggested during the meeting, said Vinod Nair, head of research, Geojit Financial Services.
Investor wealth, or market capitalisation, fell by over Rs 2.21 lakh crore Monday. Top losers in the Sensex pack included Yes Bank, M&M, Bajaj Finance, Bharti Airtel, HDFC, Maruti, Tata Steel and L&T, which fell up to 10.35 per cent. However, RIL rallied 9.72 per cent to become the biggest gainer, after Mukesh Ambani on Monday announced plans to sell stakes in the firm s oil and chemicals business to Saudi oil giant Aramco and in fuel retail network to BP plc for Rs 1.15 lakh crore, and said its telecom unit Reliance Jio will begin offering fibre-based broadband services from next month.