Sensex, Nifty head for 7th straight losing session; rupee sinks
Shares fell nearly 1 percent on Wednesday, heading for a seventh straight session of losses which could be their longest losing streak in over nine months, as the rupee sunk to a more than six-month low on foreign fund outflows. Expectations of a rate hike by the U.S Federal Reserve and lingering North Korean worries also dented risk appetite.
A lower close on Wednesday would mark the longest losing streak for the indexes after a seven-day fall that ended on December 22, 2016.
Foreign investors have net sold $777 million worth of Indian shares so far this month. They sold nearly $2 billion worth of equities in August as stretched valuations and simmering North Korea tensions saw foreign investors pulling out. The U.S. Federal Reserve last week reiterated it would continue gradually raising interest rates, including once more this year.
Foreign fund outflows have taken a toll on the rupee which on Wednesday fell to as low as 65.77 per dollar, its weakest since March 15.
"One reason why the markets were being buoyant in the recent months was because the dollar was weakening and (on expectation) that the Fed would tone down its normalization process, but that seems to be reversing" said Dhananjay Sinha, Head of Research, Economy and Strategy at Emkay Global Financial Services.
The Nifty was down 0.86 percent at 9,786.20 as of 0713 GMT, while the benchmark Sensex was trading 0.88 percent lower at 31,320.23. Blue chips were among the biggest losers, with Reliance Industries Ltd and Hindustan Unilever Ltd set for a second straight session of decline.
Banking stocks continued to slide with Axis Bank Ltd and ICICI Bank Ltd falling as much as 2.4 percent and 1.5 percent, respectively. The Nifty Bank index, down 0.78 percent, was headed for its sixth straight session of losses.
Private sector non-life insurer ICICI Lombard General Insurance Co Ltd fell as much as 3.4 percent in its market debut, after its initial public offering last week raised $871 million, amid worries about valuations. DEN Networks Ltd surged as much as 12.7 percent, following a local media report that Reliance Industries Ltd was looking to buy the cable television company.