Stocks, Re slump; gold costlier ahead of Diwali

Across-the-board selling triggered in the last half hour of trade due to  sell-off in global equities pulled down domestic shares to a two-month low

Mumbai : Global growth worries pulled down Indian stocks and rupee on Thursday while gold price surged in a festive dampener a week ahead of Diwali.

Lingering concerns about US and Eurozone growth spooked stock markets with Sensex plunging 350 points to end below 26,000 mark after two months and Nifty slumping 116 points to sub 7,800 level on across-the-board selling in the last hour of trade. Similarly, the rupee plummeted to 61.93 and closed 42 paise down at over seven-month low of 61.83 against the greenback on heavy capital outflows and a spike in demand for US dollars.

This is the weakest closing for the Sensex since 25,918.95 on August 13, 2014. Overseas investors, according to provisional data, sold equities worth over Rs 1,100 crore after about Rs 700-crore sell-off on Tuesday. Selling was so strong across Indian stocks that all 12 sectoral indices closed with losses of up to 4.25% with consumer durables, power, metal, auto, capital goods, oil&gas and IT sectors taking the lead in the downslide.

Helped by risk-aversion and a weak rupee, gold prices rose further by Rs 190 to Rs 27,840 per ten grams on sustained buying by jewellers and retailers.

“Gold prices made significant gains as equity markets faced a rout due to global growth fears,” said  Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities. In Mumbai, standard gold price rose by a hefty Rs 370 to Rs 27,520. In Kolkata, gold (24 carat) rose by Rs 55 per 10 grams to Rs 27,940 while the precious metal for retail use (22 carat) became costlier by Rs 310 at Rs 25,970 in Chennai. Gold imports are estimated to have jumped about five-times to around 95 tonnes in September, helped by spurt in demand in festival season.

The rise in local gold prices come as a dampener for the common man as September-November is a busy festival season.  “It was a scary day for Indian markets which decisively broke the important zone of 7800 on Nifty…Now actual outcome of state polls will decide the fate of Indian markets going ahead,” said Rajshekar Gowda, Senior Analyst, HBJ Capital.

Asian stocks closed lower on mounting anxiety over global growth and fears over spread of Ebola virus. Key indices in Hong Kong, Singapore, Japan, South Korea, China and Taiwan fell by 0.25 per cent to 2.72 per cent.

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