NEW DELHI: Equity indices plunged for the second straight session on Moday with the benchmark BSE sensex falling over 850 points amid selloff across sectors.
The 30-share BSE index tanked 872 points or 1.46% to close at 58,774. While, the broader NSE Nifty settled 268 points or 1.51% lower at 17,491.
Tata Steel was the top loser in the sensex pack falling as much as 4.5%, followed by Asian Paint, Wipro, Sun Pharma and L&T.
ITC and Nestle India were the only 2 stocks that finished in green.
On the NSE platform, sub-indices Nifty Metal, PSU Bank, Realty all plunged over 2%.
In the broader market, the BSE midcap gauge fell by 1.80% and the smallcap index declined 1.17%.
All the BSE sectoral indices ended lower, with metal falling 2.69%, followed by realty (2.47%), basic materials (2.44%), consumer discretionary goods & services (2.01%), finance (1.88%) and bank (1.88%).
Here are the top reasons behind today’s fall:
* Losses across sectors
All sub-indices on NSE Nifty finished in red for second straight session. Specifically, markets were dragged lower by metals and bank stocks.
According to analysts, investors booked profits following strong gains this month in the Nifty 50 index by 4.6% and 4.7% in the BSE Sensex until August 18.
Earlier in the session, metal stocks plunged, with the Nifty Metal index down 3.2%, posting its biggest percentage loss since June 22. Tata Steel fell 4.5%.
The Nifty Bank index was down 1.8%, with Punjab National Bank and Kotak Mahindra Bank leading the decline with a 2.8% and 2.4% fall respectively.
* Negative global market trends
Global shares slipped amid expectation of rate tightening by most central banks, while a modest easing by China served only to highlight troubles in its property market.
In Asia, markets in Seoul, Tokyo and Hong Kong ended lower. Shanghai, the only major market to advance, gained after China’s central bank nudged down a rate that affects mortgage costs.
Stock markets in Europe were trading lower during mid-session deals. The Wall Street had ended lower on Friday.
* Eye on annual Fed meet
Investors are watching the annual Fed meeting in Jackson Hole, Wyoming, after minutes last week from the US central bank’s July board meeting affirmed plans for rate hikes despite signs of weaker economic activity.
Traders worry aggressive steps to contain inflation that is running at multi-decade highs might derail global economic growth.
“The Fed is still feeling inflation. Its actions have not even begun to dent inflationary pressures at all,” said Clifford Bennett of ACY Securities in a report. “Nor have they begun to crimp economic activity at all. The economic slowdown was already in play for other reasons.”
* US dollar continues to dominate
The US dollar, meanwhile, continued to steamroll other currencies, rising briefly above parity versus the fragile euro and hitting five-week highs against a basket of peers as Fed officials reiterated their tightening stance.
The greenback has risen steadily against peers in the last few months as the most liquid of safe havens, last week jumping 2.3% in its best performance since April 2020.
Global bond yields spiked last week amid the relentless drumbeat of worrying inflation data, with British 10-year yields up by the most in five years and bund yields likewise soaring on reports showing sky-high prices.
* Rupee at 4-week low
The Indian rupee hit a four-week low on Monday as the dollar continued its rally on the U.S. Federal Reserve’s hawkish stance, while the Chinese yuan’s weakness exacerbated losses in the local currency.
The partially convertible rupee fell 0.1% to 79.875, having dropped to its lowest level since July 27 at 79.9125.
After jumping 2.3% last week, the greenback extended its gains to firm up at 108.4 on Monday as Fed officials reiterated an aggressive monetary tightening stance ahead of the Jackson Hole symposium on Thursday.
(With inputs from agencies)