Sensex, Nifty fall more than 1%; rupee down
Myanmar border tensions weaken sentiment
MUMBAI: Fortunes soured for stocks for the seventh day in a row as the Sensex on Wednesday plunged a sharp 440 points to close at an over three-month low, triggered by a weakening rupee on concerns that foreign capital will move out sooner than later after Fed Chair Janet Yellen’s comments.
Yellen, in a speech, said the US Federal Reserve should stick to gradual rate hikes despite the uncertainty about the inflation trajectory. This was enough for foreign investors to hit the exit button, looking for instruments that yield better returns.
The rupee took a hammering, sinking to over a six-month low of 65.75 against the dollar during the day. The lingering Korean stand-off dealt a further blow after US President Donald Trump dialled up his threats saying America is “totally prepared” for a “military option” on North Korea, warning that would be “devastating”.
Updates of military action on the eastern border hastened the market’s fall, which has been on a slippery slope ahead of the derivatives expiry tomorrow.
Clearly, it was downhill drive for the BSE benchmark right in the beginning, which settled lower by 439.95 points or 1.39%, at 31,159.81 points. This is the weakest closing since June 30 when the gauge had settled at 30,921.61. It had lost 824 points in the previous six sessions.
Mood was downcast at the 50-share NSE Nifty too, which after regaining the key 9,900mark at one stage closed down 135.75 points or 1.38%, at 9,735.75—a level last seen on August 11 when it closed at 9,710.80. Investors’ wealth as measured by market capitalisation of BSE listed companies took a big knock of ₹1,79,524 crore, which read ₹1,30,55,056 crore.