Sensex in red after global rout

The equity markets slumped for the second consecutive day as weakness in global stocks amidst growing worries regarding global growth slowdown and disappointing revenue guidance provided by IT major Cognizant Technologies triggered broad based sell- off in domestic equities.

The Sensex dropped 266.44 points or 1.10 per cent to end the day at 24,020.98. The Nifty closed the day at 7298.20, down 89.05 or 1.21 per cent.

The slide in the Asian markets was triggered by steep correction in Japanese equities, which was the biggest daily drop in nearly three years. The Nikkei 225 tumbled 5.40 per cent on Tuesday after yields on long- term Japanese bond fell below zero and Yen climbed to over one year high.

“Gold has surged more than 10 per cent in 2016 till date, Japan’s 10 year government bond yield has come to negative terrain and the Yen has climbed to more than a one year high against the US dollar. This highlights the elevated risk averse sentiment in the global markets,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services.

According to the provisional data released by the stock exchanges, foreign portfolio investors pulled out funds worth ` 680.70 crore.

The lower revenue guidance from Cognizant Technologies triggered selling pressure in frontline IT stocks. While the shares of TCS slumped 3.66 per cent, the shares of Infosys dropped 3.46 per cent.

The weakness in domestic equities has also impacted sentiments in the forex market.