The index marked its biggest weekly fall this year after an increase in retail inflation data raised concerns about interest rate cuts
Mumbai : Indian benchmark indices hit their lowest levels in a month with the Sensex tanking 427 points to 28,503.30 and the Nifty plunging 128 points to 8,647.75 due to intense selling pressure after rise in retail inflation dashed hopes of aggressive interest rate cuts.
Share indices also slumped as rumours about income tax raids on brokers spread, dealers said. Also,
speculation that the government may ask overseas investors to pay tax on their income from participatory notes dented sentiment. “Bears are spreading messages of P-notes taxation to create panic in the market but no official announcement has come yet,” said a dealer. Talk of notice on minimum alternate tax to foreign institutional investors also put pressure on the market.
The selling was indiscriminate as all sectoral indices bore the brunt of the intense sell-off. Mid-cap and small-cap shares too crumbled. Losers on the BSE outnumbered the gainers with over 1900 stocks ending in the red while 900 edged up.
The Indian rupee breached the 63-mark intra-day against the Greenback and ended with a sharp loss of 47 paise at 62.97 on sustained dollar demand from importers amid weakness in local shares. It crossed the 63-level after two months as it hit a low of 63.0025 on Friday. On a weekly basis, the rupee tumbled by 81 paise or 1.30 per cent.
The Sensex opened with a gap-up at 29,134.93 and swung between a wide range of 29,183.76 and 28,448.48 before concluding at 28,503.30, posting a massive loss of 427.11 points, or 1.48 per cent, over its last close. On a weekly basis, it has stumbled by 945.65 points or 3.21 per cent.
Among 30 Sensex components, 27 stocks ended down while Bharti Airtel, ONGC and NTPC gained.
The 50-share broader NSE-Nifty plummeted by a hefty 128.25 points to end at 8,647.75.
The Bank Nifty slumped 1.9% to 18779.80 points as all banks fell up to 2.6%. Among its constituents, Federal Bank led the losses, ending down 2.6% at 136 rupees and ICICI Bank fell 2.4% to 330.20 rupees.
“Uptick in food inflation could continue into March with rain disruptions over last month causing some short term flare ups….given the limited room to manoeuvre and RBI’s challenging task of taking CPI inflation down to 4 per cent by early 2018, the central bank can ill afford to cut policy rates aggressively from here,” said Pranjul Bhandari, Chief India Economist, HSBC.
On the global front, major equities in the region ended higher tracking positive lead from Wall Street overnight. Key indices in China, Hong Kong, Japan and South Korea gaining 0.11-1.39 per cent while Singapore and Taiwan settled lower.
Europe was trading better in late morning deals on hopes a rate hike by US Federal Reserve may be delayed due to disappointing data on retail sales.
Heightened speculations of an earlier-than-expected rate hike with the Federal Reserve’s March 18 monetary policy meeting looming large alongwith concerns over Greece situation also forced some to offload stocks, said a trader.
