Nifty plunges 1.5% on panic selling; Jindal Steel melts
Heightened fears over foreign fund outflows from Indian markets in the backdrop of sliding rupee and weakness in global stocks triggered panic selling Tuesday as the NSE benchmark CNX Nifty tanked by a massive 89 points to close below the important 5,800 mark.
Mumbai: Heightened fears over foreign fund outflows from Indian markets in the backdrop of sliding rupee and weakness in global stocks triggered panic selling Tuesday as the NSE benchmark CNX Nifty tanked by a massive 89 points to close below the important 5,800 mark.
The crumbling rupee dimmed prospects of a bold rate cut by RBI to stimulate growth besides having an adverse impact on fiscal deficit. The apex bank is slated to announce its mid-quarter monetary policy on June 17.
Financials, FMCG, oil&gas, metal, auto and infra stocks suffered the most, though the sell-off was widespread.
After a weak start, the market was mainly guided by the Indian currency's movement, which hit a life-time low of 58.98 versus dollar in intra-day trade before erasing early losses to close at 58.39 on RBI intervention.
Though the market made a pull-back attempt in line with rupee recovery, it encountered heavy selling.
The sharp decline in rupee and volatility has surprised everyone. The equity markets may be headed for a sharp correction if there is no recovery in rupee in the coming weeks, traders warned.
Asian financial markets witnessed a sell-off spooked by Bank of Japan decision to keep policy unchanged and concerns over weak Chinese data amid speculation the Federal Reserve will begin to scale back stimulus measures soon after ratings agency Standard and Poor's revised its long-term outlook on the US credit rating to stable from negative.
The Nifty closed at 5,788.80, down 89.20 points, or 1.52 percent, after hitting a low of 5,780.35.
Jindal Steel plunged by 15.38 percent after the promoter Naveen Jindal and the company were named as accused in a fresh FIR filed by CBI in the coal allocation scam. Other key losers included Hindalco, Tata Power, DLF, ONGC, ICICI Bank, IndusInd Bank, Reliance Infra, IDFC and Coal India.
Ambuja Cement, Cipla, Bajaj Auto, Gail, Ranbaxy, HUL, Grasim, NTPC, DRL and L&T were the notable Nifty gainers.
Turnover in the cash segment jumped to Rs 11,436.42 crore from Rs 8,405.76 crore yesterday. A total of 6,640.12 lakh shares changed hands in 60,64,459 trades. Market capitalisation stood at Rs 63,12,301 crore.