Sensex nosedives 806 pts on rising crude, rupee woes

The equity benchmark Sensex Thursday hit its lowest level in three months, crashing over 806 points to close below the 35,200-level as concerns over weakening rupee and rising crude oil prices spooked investors.

Similarly, the NSE Nifty cracked the 10,600-level by falling 259 points.

The rupee plunged to an all-time low (intra-day) of 73.81 to the US dollar and global crude oil prices touched a four-year high of USD 86 a barrel, triggering worries for India on the macro-economic front.

The weakness in other Asian markets and a lower opening of the european shares also added to negative sentiments on the domestic bourses.

"The strongest of businesses and the bluest of blue chips have cracked in the last couple of sessions, which highlights the prevailing negative sentiment and environment of pessimism. With the rupee hitting record low, crude prices moving northwards, increasing fears of a broadening current account deficit along with the liquidity worries led to another major fall in the indices..." Devang Mehta, Head - Equity Advisory, Centrum Wealth Management, said.

A sharp plunge mainly in healthcare, IT, oil&gas, banking and auto pulled the Sensex lower by 806.47 points, or 2.24 per cent, to 35,169.16 points, extending losses for the second straight day. Intra-day, it hit a low of 35,022.12.

This is the lowest closing since July 2 when the index had settled at 35,264.41.

The gauge had lost 550.51 points Wednesday on rupee woes coupled with surging crude oil prices and unabated foreign fund outflows.

In the process, more than Rs 5 lakh crore has been wiped out in the last two trading sessions from the overall investors' wealth.

The 50-share NSE Nifty also cracked the 10,600-level by falling 259 points, or 2.39 per cent, to close at 10,599.25 after hitting a low of 10,547.25.

Besides, traders have been cautious ahead of the outcome of the ongoing three-day RBI policy meet that began Wednesday.

"Anxieties over the Reserve Bank of India (RBI) adopting an aggressive stance in its monetary policy due to a rise in inflationary pressure led to an erosion in investors' risk appetite. With deteriorating macros, all eyes will now be on the second quarter earnings and how the current liquidity situation is addressed," Mehta said.

Also, weak cues from other most Asian markets as high US yield and upbeat economic data led to fear that investors would move to the US, accelerating selling pace on the domestic bourses.

According to analysts, the equity benchmark indices have fallen nearly 10 per cent from peak levels attained in August, led by weak domestic sentiments, global uncertainties, depreciating rupee and boiling crude oil prices.

With rupee and crude oil showing no signs of stability, weakness is likely to continue in the coming sessions, analysts said.

The international benchmark Brent crude prices hit a four-year high of USD 86.10 a barrel while WTI at USD 76.23 a barrel.

Stocks of tyres, paint and chemical companies turned distinctly weak as crude oil surged to near four-year high. Crude is main raw material used by these industries.

Selling pressure was broad-based, while IT, teck, realty and oil & gas and auto stocks were the worst hit.

Foreign portfolio investors (FPIs) sold shares worth a net of Rs 1,550 crore, while domestic institutional investors (DIIs) made purchases to the tune of Rs 1,402 crore Wednesday.

Reliance Industries emerged as the biggest loser in the Sensex pack with its shares plunging 7.03 per cent, while Hero MotoCorp lost 5.45 per cent.

Other laggards were TCS 4.54 per cent, Adani Ports 4.17 per cent, ONGC 3.74 per cent, Sun Pharma 3.70 per cent, HDFC Bank 3.46 per cent, Bajaj Auto 3.04 per cent, IndusInd Bank 3.03 per cent, HUL 2.97 per cent, Bharti Airtel 2.95 per cent, ITC Ltd 2.49 per cent, Kotak Bank 1.93 per cent, Asian Paint 1.90 per cent, Tata Motors 1.89 per cent, Coal India 1.61 per cent, HDFC Ltd 1.33 per cent, Maruti Suzuki 0.80 per cent and SBI 0.69 per cent.

Also, Wipro, NTPC and PowerGrid fell up to 0.08 per cent.

Among winners, ICICI Bank was the top performer, climbing 4.07 per cent, followed by Axis Bank at 2.70 per cent. L&T rose 1.18 per cent, Yes Bank gained 1.08 per cent, M&M was up 0.52 and Tata Steel added 0.38 per cent.

Sectorwise, the BSE oil & gas index suffered the most by crashing 6.58 per cent, followed by IT 3.28 per cent, healthcare 3.02 per cent, teck 2.97 per cent, FMCG 2.56 per cent, PSU 2.54 per cent and auto 1.84 per cent.

Infrastructure, consumer durables, realty, power, metal, bankex and capital goods indices too ended lower by up to 1.74 per cent.

The broader markets too continued to face heat with the the midcap and small-cap indices ending notably lower as investors indulged in trimming their portfolios in line with overall trends.

Elsewhere in Asia, Kong's Hang Seng lost 1.73 per cent, Japan's Nikkei shed 0.56 per cent, while Taiwan plunged 1.33 per cent.

In the euro zone, Frankfurt's DAX fell 0.39 per cent, Paris CAC was down 0.90 per cent, while London's FTSE declined 0.85 per cent in their early sessions.