Sensex trips on plunging rupee, Turkish turmoil

Benchmarks spiralled downwards on Thursday, as a plunging rupee and Turkey’s financial crisis sparked a retreat from equities, while lacklustre macro data further sapped investor confidence.

The BSE Sensex tumbled over 188 points to close at 37,663.56, while the broader NSE Nifty shed 50.05 points to crack below the 11,400-mark.

The rupee slumped to an all-time low of 70.40 per dollar (intra-day) on persistent foreign fund outflows.

Weak leads from other Asian bourses following Turkey’s currency crisis and fears of an economic slowdown in China affected sentiment on Dalal Street, brokers said.

Trading momentum was further impacted as the country’s trade deficit soared to a near five-year high of $18 billion in July, according to official data released after market hours on Tuesday.

After opening lower at 37,796.01, the 30share Sensex slipped further to touch a low of 37,634.43, but a rally in Infosys, Sun Pharma and Tata Motors lent a helping hand.

The index finally settled at 37,663.56, down 188.44 points, or 0.50 per cent.

Markets were shut on Wednesday on account of Independence Day.

The NSE Nifty traded in the red for the major part of the session and cracked below the 11,400-mark to hit a low of 11,366.25. It later recovered a bit to finish at 11,385.05, showing a loss of 50.05 points, or 0.44 per cent. Meanwhile, foreign institutional investors (FIIs) offloaded shares worth a net of ~3.79 billion, while domestic institutional investors (DIIs) bought shares worth ~3.91 billion on Tuesday, provisional data showed.

“Markets slid as depreciation in rupee on account of widening trade gap impacted investors sentiment. Additionally, domestic yield surged due to concern on inflation and weakness in the rupee. Moderation in

oil price and expectation of reversal in FII inflow due to pick up in earnings will cap downside. On the sectorial front, metal and PSU bank under-performed while IT and pharma gained owing to deprecation in the rupee,” said Vinod Nair, Head of Research, Geojit Financial Services.