Benchmark indices came crashing down in trade today, as the rupee hit a new lifetime low of 73.40 to the dollar. This was despite strong cues from across Europe and despite the Dow Jones hitting a new lifetime high.
The Sensex ended the day 550 points lower at 35,975 points and the Nifty plunged 150 points to end at 10,858 points . The rupee was last seen at 73.23 to the dollar.
Ironically, IT stocks, which should have rallied on account of a falling rupee, dropped, dragging the indices lower. Heavyweight, TCS was a big loser dropping as much as 4.35 per cent in trade. Mahindra and Mahindra lost 5 per cent, while another IT stock, Infosys was down 2.5 per cent in trade.
Interestingly, government owned banking stocks were seeing decent buying support after the government stepped in to contain the IL&FS fiasco. Punjab National Bank was the top gainer from the space, rallying as much as 2 per cent on buying support.
Yes Bank, which has seen a massive fall in the last few trading days, managed to gain in trade and was up a staggering 5 per cent. Another stock that was beaten down in the recent carnage, DHFL managed to trade higher.
Shares in National Aluminium Company was a star performer in trade after reports that Norsk Hydro moved to shut its biggest alumina refinery in Brazil. Shares of NALCO ended the day higher by 11 per cent.
Markets in India are expected to be volatile ahead of the RBI's Monetary Policy. A decision on interest rates would be taken by the RBI on Oct 5, in which it is widely expected that the central bank would hike interest rates by 0.25 per cent to curb the fall in the rupee.