The spectre of interest rates hikes by various central banks and their adverse effect on growth continued to weigh in on market sentiment with the Sensex plummeting nearly 640 points to settle below the 57000 mark while the Nifty settled 207 points lower.
It was not a good beginning to the week for the rupee as well. The domestic currency fell to an intra-day low of 81.93 against the dollar after two days of gains after opening on poor note at 81.62.
Its losses came as Brent crude oil prices inched up on news that OPEC+ will consider an output cut of up to one million barrels per day at a meeting this week to support the market, even as the Dollar Index remained strong.
Brent crude was trading higher nearly five per cent at $89.31 per barrel at the time of writing this report, while the DXY which gauges the greenback’s strength against a basket of six currencies was trading steady at nearly 112. The rupee later settled at 81.87 — a loss of 25 paise over the previous close.
At the stock markets, the selling was more pronounced in the second half amid weak global markets. While investors sold banking, auto and FMCG stocks, pharma showed some defensive buying.
After opening at 57403.92, the 30-share Sensex tanked 743.52 points or 1.29 per cent to a day’s low of 56683.40. It thereafter ended 638.11 points or 1.11 per cent lower at 56788.81.
The broader NSE Nifty fell by 207 points or 1.21 per cent to settle at 16887.35 as 42 of its constituents declined.
Among Sensex stocks, Maruti fell the most by 3.16 per cent. It was followed by Hindustan Unilever which declined 2.77 per cent, IndusInd Bank by 2.55 per cent, ITC by 2.32 per cent, Bajaj Finance by 2.26 per cent, State Bank of India by 2.15 per cent and Kotak Mahindra Bank by 2.03 per cent.
Analysts said that while investors remain worried about global recession due to the interest rate actions by various central banks, speculations about the financial stability of Credit Suisse, the second largest Swiss bank has also affected sentiments overseas.
The next trigger will be the earnings season that will kick off on October 10, when TCS will announce the numbers for the second quarter ended September 30.
"For now global factors are outweighing the investor’s sentiments with concerns over the financial health of Credit Suisse, worsening Russia-Ukraine conflict and worries over inflation. As global nervousness increased, profit booking was witnessed in outperforming stocks and sectors. Expect Nifty to remain sideways to weak for now until we see some stability in global markets,’’ Siddhartha Khemka of Motilal Oswal Financial Services said.
Rupee dips
■ Sensex below 57000
■ Rupee down 25p to 81.87
■ Global recession fears sour mood
■ Results to be next trigger