Mumbai : Market let go of its winning momentum of the past three days as the Sensex slumped 114 points after Europe turned shaky over talk of withdrawal of ECB stimulus and on profit-booking in recent outperformers.
There is a heightened sense of speculation, especially after comments from top Fed officials, that a US rate hike is coming before the end of this year.
“Speculation over a taper in ECB’s stimulus measures has pushed the global bond yields on a rise and kept the European equity markets under vigil. As a result domestic investors are cautious…,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services, reports PTI.
Investors were also wary of the threat of a hard Brexit. Slower services growth in September added to the worries.
The Nikkei India Services PMI stood at 52 in September, down from August’s 54.7, pointing to a slower rate of expansion. The 30-share index settled lower by 113.57 points, or 0.40 per cent, at 28,220.98. The gauge, which rose over 91 points after a surprise 0.25 per cent rate cut by RBI in its policy review yesterday, had gained 507.02 points in the previous three sessions.
The NSE Nifty reclaimed the 8,800-mark, but could not hold on to it under the selling pressure.
It closed down 25.20 points, or 0.29 per cent, at 8,743.95.
In the beginning, the mood was one of big optimism on IMF growth upgrade for India to 7.6 per cent for 2016-17, which pushed up buying.
But soon, this gave way to profit-booking in recent gainers, led by banking and auto, and weak global cues further pushed down the indices into negative territory. In stock-specific action, ONGC plunged 2.56 per cent to Rs 266.75 while Axis Bank lost 2.03 per cent to Rs 535.70, mainly after investors booked profit.