Markets get shaky on rouble tumble, plummet 538 pts

Markets get shaky on rouble tumble, plummet 538 pts

Markets get shaky on rouble tumble, plummet 538 pts

It was carnage on Dalal Street as Indian benchmark indices nosedived on Tuesday, taking a cue from a global market selloff and a dip in currencies, globally. While the Sensex ended a whopping 538.12 points lower at 26,781.44, the Nifty crashed 152 points to end at 8,068.

The situation on the stock market resulted in the rupee plummeting to a 13-month low of 63.53 against the dollar, due to heavy demand for the US currency from importers and some banks amid falling oil prices and chaos in stock markets.

“Markets opened lower, taking cues from global sell off that fell tracking decline in crude oil prices. Reports of the government tabling the Goods and Services Tax (GST) Bill in the current Parliament session limited the downside to some extent,” Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities said.

According to a report by brokerage firm Motilal Oswal, the global equity and currency selloff, triggered by fears of a Russian default, pulled down the market. Earlier, the Russian central bank had raised its key interest rate to 17 per cent from 10.5 per cent to prevent the rouble from crashing further.

Nifty was dragged by financials and energy companies. Oil marketing companies rose, while upstream petroleum companies declined. Out of the 50 stocks on the Nifty, 44 declined, while only 6 stocks advanced. Pharma majors Dr Reddy’s and Glenmark declined 6 per cent and 4 per cent respectively as both companies have exposure to Russian market.

Banking stocks like SBI slipped 5 per cent to close at Rs 296. Others like Syndicate Bank, Federal Bank, Axis Bank, ICICI Bank, Andhra Bank, Oriental Bank of Commerce, Punjab National Bank, Bank of Baroda declined 2-7 per cent. Hindalco declined 5 per cent to close at Rs 145 after the news that the Court rejected CBI report on Hindalco coal case closure.

Tech majors however bucked the trend to end higher. HCL Tech ended 5.03 per cent higher at Rs 1,560 on the Nifty with volumes of 10.85 lakh shares. TCS was up 3.83 per cent at Rs 2449 while Tech Mahindra ended in the green with a gain of 1.6 per cent at Rs 2535.60. Infosys also ended marginally higher (0.62 per cent) at Rs 1936.65.

Meanwhile, referring to the fall in the rupee value, dealers in foreign exchange said that the Reserve Bank of India may have intervened in the markets, but it seemed dollars selling through state-ran banks did not pay off.

They also predicted that the rupee is likely to breach the 64-mark as early as Wednesday.

At the Interbank Foreign Exchange (Forex) market, the rupee commenced sluggish at 63.25 a dollar. Sustained capital outflows pulled it further down to a low of 63.59.
It finally ended the day at 63.53, a fall of 59 paise or 0.94 per cent.

This is the worst single day loss for the domestic currency in more than four months. The rupee had tumbled by 65 paise on Monday.

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