Sensex, Nifty fall most in 7 weeks ahead of Fed meet

Sensex, Nifty fall most in 7 weeks ahead of Fed meet

In their worst single-day drop in nearly 7 weeks, Sensex on Tuesday  plunged 324 points and Nifty tanked 109 points on across-the-board selling on caution ahead of the outcome US Federal Reserve’s monetary policy meeting.

An earlier-than-anticipated rate hike by Fed after the two-day meeting that starts later today could lead to outflows, hurting emerging markets as the incentive for investors to chase higher yields becomes smaller.

Major bourses in Asia ended down and Europe was weak in morning trades. Rupee also continued to remain above 61-mark against dollar as domestic indices ended at three-week lows.

Besides, BJP heading for a sharp setback in bypolls appears to have had a bearing on sentiment, say brokers.

All-round selling was seen as all 12 BSE sectoral indices closed in the red, with realty, power, capital goods, refinery, consumer durable, banking and auto segments taking the lead in the downslide.

The 30-share BSE Sensex resumed better but fell back and continued its fall on sustained heavy selling. It settled at three-week low of 26,492.51, a steep fall of 324.05 points or 1.21 per cent. Previously, it had plunged by 414.13 points, or 1.60 per cent, on August 1, 2014.

Tata Power, Tata Steel, Hindalco, NTPC, Tata Motors, ONGC, RIL, GAIL led the 23 laggards in Sensex.

The 50-issue Nifty stumbled by 109.10 points, or 1.36 per cent, to end below 8K-mark at a 3-week low of 7,932.90. This is its worst show since August 1 when it fell 118.70 points.

Smallcap and midcap stocks, which in previous sessions had bucked a weak trend, saw a huge sell-off with their indices falling over 3 per cent each.

In Asia, barring KOSPI, all major markets ended in the red on Fed rate hike fears and weak China data. Europe saw major benchmarks trading 0.4-0.6 per cent lower.
Oil Marketing Companies (OMCs) were at the receiving end on speculation fuel prices will not be touched till Maharashtra and Haryana elections are over. IOC, HPCL and BPCL fell.

Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 74.59 crore on Monday as per the provisional data.

Jignesh Chaudhary, Head of Research, Veracity Broking Services said: “Local indices gave up over one per cent, retreating from record highs touched last week. Market continues to be in profit booking mode and are trading cautiously ahead of Fed meeting outcome late Wednesday.”

Key benchmark indices in Singapore, Taiwan, Japan, Hong Kong and China fell by 0.35 per cent to 1.82 per cent while South Korea's Kospi rose by 0.75 per cent.
Dr Reddy’s Lab, however, rose 1.15 per cent on defensive buying. ITC, Infosys, Airtel, HUL, Sun Pharma and M&M also rose.

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