Sensex, Nifty tumbles over 3.6 pc after global sell-off

Wednesday, 07 Feb, 2018

Indian shares fell for a fifth straight session on Monday, with the broader NSE index hitting its lowest in a month, as Asian shares slumped, while worries remained that the Reserve Bank of India would turn more hawkish at its policy meeting later this week.

The S&P BSE Sensex dropped for a sixth day, falling 1.6 percent to close at 34,195.94 in Mumbai for its longest run of losses since September.

The barometer had lost 1,216.50 points in the previous four sessions, following nervous offloading of positions by participants, triggered by imposition of long-term capital gains of 10 per cent on equities in the Budget 2018. Nevertheless, it appears that investors' reaction to the government's plan to bring back the Long-Term Capital Gains (LTCG) tax may have contributed to the Sensex's current situation.

Market sentiment took a beating in line with sharp losses at other Asian markets after a record-breaking loss on Wall Street after investors fret over rising U.S. borrowing costs, brokers said. Both Sensex and Nifty fell about 3.5 percent, biggest fall since August 2015.

"As expected, RBI continued to stay on the neutral stance awaiting more upcoming domestic and global macro data, and seeing some sanity in the bond market".

Earlier in the day, amid global market recovery, the Sensex rebounded by 367.36 points, while the Nifty hovered around the 10,600 mark.

Post the Union Budget on February 1, the 30-share index has plummeted by 2,164.11 points.

The Indian indices receded in-line with their global peers - Nikkei, Hang Seng, Shaghai, Taipei, Seoul and Singapore - all of which ended lower following an overnight downward correction in Dow Jones by over 1,100 points.

The rupee appreciating further to 64.68 against the dollar (intra-day) at the forex market too fuelled the rally. The BSE market breadth was bearish as 1,753 stocks declined as against 1,027 advances.

Adhia said he will discuss the issue of the fall in local markets with the finance minister.

Volatility index VIX was trading 27.88 per cent higher at 20.53, signalling heightened volatility.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,263 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 1,163 crore Monday.

The only gainer on the BSE was Tata Steel which rose a tad 0.06 per cent to close at Rs 664.95.