Sensex tanks second day in a row, sinks 406 points on Fed taper buzz
MUMBAI: Speculation on what the US central bank will do with its cheap
money policy caused India’s stocks to plunge again on Thursday in the
latest instance of volatility.
The benchmark Sensex fell 406 points, or 2%, to 20,229 on fears of receding foreign inflows that surfaced after the US Federal Reserve on Wednesday hinted at easing its monetary stimulus programme by as early as December. About ` 1,15,080 crore in investor wealth was wiped out.
It was the biggest decline for the index since September 3 when it had lost 652 points, or 3.5%, and a marked fall from the all-time high of 21,294 hit on November 1 (see graphic). The Sensex has lost 662 points in the last two days.
The broader NSE Nifty also closed down 124 points, or 2%, to 5,999, marking its biggest singleday fall since September 23 and closing below the key 6,000 level.
The US Fed on Wednesday signalled that a tapering of bond buying could start soon, which along with China’s downbeat manufacturing data, hit global stocks. Waning risk appetite from foreign investors is reviving concerns about India’s vulnerability once the US central bank begins winding down its stimulus programme, given the country’s dependence on overseas flows to bridge its current account deficit (the difference between dollar inflows and outflows).
The benchmark Sensex fell 406 points, or 2%, to 20,229 on fears of receding foreign inflows that surfaced after the US Federal Reserve on Wednesday hinted at easing its monetary stimulus programme by as early as December. About ` 1,15,080 crore in investor wealth was wiped out.
It was the biggest decline for the index since September 3 when it had lost 652 points, or 3.5%, and a marked fall from the all-time high of 21,294 hit on November 1 (see graphic). The Sensex has lost 662 points in the last two days.
The broader NSE Nifty also closed down 124 points, or 2%, to 5,999, marking its biggest singleday fall since September 23 and closing below the key 6,000 level.
The US Fed on Wednesday signalled that a tapering of bond buying could start soon, which along with China’s downbeat manufacturing data, hit global stocks. Waning risk appetite from foreign investors is reviving concerns about India’s vulnerability once the US central bank begins winding down its stimulus programme, given the country’s dependence on overseas flows to bridge its current account deficit (the difference between dollar inflows and outflows).
Dipen Shah, head, private client group research, Kotak Securities
said the Fed was the market driver while fundamentals of stocks needed a
push.
“Introduction of more fiscal reforms and effective implementation of them are the prerequisites for the markets to improve their current valuations,” he said.
All 30 Sensex shares ended in the red led by Sesa Sterlite (down 3.9%), HDFC (down 3.6%), L&T (down 2.9%), BHEL (down 2.7%) and NTPC (down 2.6%).
Among the sectoral indices, bankex dropped 2.5%, followed by capital goods (down 2.4%), realty (down 2.3%), power (down 2.1%) and PSU (down 2%).
On the BSE, 1,552 stocks fell, 922 advanced and 137 ruled steady.
Overseas investment in stocks fell to ` 80 crore at the end of Wednesday’s trade from ` 1,015 crore a day earlier, according to provisional stock exchange data.
“Introduction of more fiscal reforms and effective implementation of them are the prerequisites for the markets to improve their current valuations,” he said.
All 30 Sensex shares ended in the red led by Sesa Sterlite (down 3.9%), HDFC (down 3.6%), L&T (down 2.9%), BHEL (down 2.7%) and NTPC (down 2.6%).
Among the sectoral indices, bankex dropped 2.5%, followed by capital goods (down 2.4%), realty (down 2.3%), power (down 2.1%) and PSU (down 2%).
On the BSE, 1,552 stocks fell, 922 advanced and 137 ruled steady.
Overseas investment in stocks fell to ` 80 crore at the end of Wednesday’s trade from ` 1,015 crore a day earlier, according to provisional stock exchange data.
PGDM 1 SEM
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