Mumbai, May 23 (IANS) Persistent outflow of foreign funds along with weak global cues and a depreciation in the rupee led to the key Indian equity indices plunging on Wednesday.
According to market observers, rise in domestic transportation fuel prices as well as renewed global geopolitical tensions and trade disputes between the US and China eroded investor sentiments.
Consequently, the wider Nifty50 of the National Stock Exchange (NSE) closed at 10,430.35 points, down 106.35 points or 1.01 per cent from the previous close of 10,536.70 points.
Similarly, the barometer 30-scrip Sensitive Index (Sensex) of the BSE tumbled nearly one per cent. It opened at 34,656.63 points and closed at 34,344.91 points -- down 306.33 points or 0.88 per cent -- from its previous session's close of 34,651.24 points.
In terms of intra-day trade, Sensex touched a high of 34,668.47 points and a low of 34,302.89 points. The BSE market breadth was bearish with 1,587 declines and 1,168 advances.
"Markets corrected sharply on Wednesday after witnessing a minor bounce on Tuesday. The weakness came on the back of weak global cues as investors were concerned about trade tensions, the possible cancellation of North Korea summit planned in June, economic issues in Turkey and commodity prices fall," said Deepak Jasani, Head of Retail Research at HDFC Securities.
"Major Asian markets have closed on a negative note, barring the KOSPI and Jakarta indices. European indices like FTSE 100, CAC 40 and DAX are trading in the red."
Geojit Financial Services' Head of Research Vinod Nair said: "Market edged lower amid pessimism on global trade talks and below par fourth quarter earnings."
"Metals sank while PSU bank outperformed and prevented the market from a nose dive correction. Investors expect that the worst is over related to PSU banks NPA with adequate provisions and expectation of recapitalisation from government.
"On the other hand, rupee continued to fall and the fear of inflationary pressure may lead the market to consolidate," Nair added.
On the currency front, the Indian rupee weakened by 38 paise against the US dollar to 68.43, from its previous close at 68.05 per greenback.
Besides, provisional data with exchanges showed that foreign institutional investors sold scrips worth Rs 311.11 crore, while the domestic institutional investors bought stocks worth Rs 789.78 crore.
Sector-wise, the S&P BSE consumer durables index and the capital goods index gained by 62.06 points and 10.54 points respectively.
On the other hand, the S&P BSE metal index plunged by 534.27 points, followed by the oil and gas index, which receded by 491.72 points and the auto index that ended lower by 130.31 points.
The major gainers on the Sensex were State Bank of India, up 3.56 per cent at Rs 263.20; NTPC, up 0.82 per cent at Rs 166.35; Larsen and Toubro, up 0.55 per cent at Rs 1,327.20; Tata Motors, up 0.49 per cent at Rs 309.25; and Mahindra and Mahindra, up 0.05 per cent at Rs 831.25 per share.
The top losers were Tata Steel, down 6.57 per cent at Rs 539.25; ONGC, down 4.75 per cent at Rs 175.55; Dr Reddy's Lab, down 2.92 per cent at Rs 1,955; IndusInd Bank, down 2.80 per cent at Rs 1,856.70; and ITC, down 1.92 per cent at Rs 273.45 per share.
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