Negative global cues, coupled with a slump in commodity prices and a weak rupee depressed the Indian equity markets on Wednesday. This led to a barometer index provisionally closing 418 points down.
The selling frenzy led both the bellwether indices of the Indian equity markets to trade at levels which were last seen during May-June 2014.
They even touched their new 52-week low during the intra-day trade.
Initially both the bellwether indices opened on a weak note in-sync with their Asian peers and due to the flat closing of the US markets on Tuesday.
The selling pressure was accelerated by absence of any fresh positive trigger and below expected third quarter (Q3) results.
Furthermore, investors were seen cautious regarding the sliding value of rupee which touched a low of 68.05 to a US dollar — its weakest level since September 2013 during the intra-day trade.
The rupee previously closed at 67.64-65 to a greenback.
The weakness in the rupee value indicates the massive foreign funds outflow from the Indian equity and debt markets.
The foreign institutional investors (FIIs) were net sellers in the equity markets on Tuesday. They divested Rs.857.70 crore.
Besides, long-liquidation positions and disappointing macro-data points for December which eroded investors’ hopes for an interest rate cut during the upcoming monetary policy review of the apex bank dented sentiments.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) plunged by 462 points or 1.89 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading deep in the red. It was down by 139.20 points or 1.87 percent at 7,295.90 points.
The NSE Nifty touched a new 52-week low at 7,281.95 points.
The S&P BSE Sensex, which opened at 24,325.77 points, was trading at 24,018.19 points (1.45 p.m.) — down 461.65 points or 1.89 percent from the previous day’s close at 24,479.84 points.
During the intra-day trade, the Sensex touched a high of 24,325.77 points and a low of 23,974.58 points — its new low in 52 weeks.
The S&P BSE market breadth favoured the bears — with 2,091 declines and only 384 advances.
“Bearish Asian markets, plunge in the rupee value and and continuous weakness in oil prices has pulled down markets,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told .
“The general weakness that has plagued markets for the last fortnight has continued, in the absence of fresh positive triggers.”