The Sensex fell over 640 points on Wednesday closing below 24,000 mark for the first time since the day Modi government took over in May 2014. Beside the mayhem in the stock market, Rupee too breached 68-mark against the dollar for the first time since September 4, 2013. The Indian currency traded at Rs 68.07 per US Dollar, falling 42 paise further, on the grounds of strong dollar demand from importers amid continuing capital outflow by foreign funds.
The trend of day could be sensed early in the morning as markets opened on the lower side due to the fall in crude prices. As the day progressed, the market benchmark Sensex cracked below the 24,000-mark for the first time since May 16, 2014, by plunging 640 points to 23,839.76.
Moreover, the broader NSE Nifty dipped below the 7,300-mark for the first time since June 2, 2014.
But the big concern, however, remains the dipping trend of Rupee. At the Interbank Foreign Exchange (Forex) market, the local currency opened sharply lower at 67.77 from its previous close of 67.65 and breached 68 level for the time since September 4, 2013, to hit a low of 68.07 (intra-day), down 42 paise.
Forex dealers said besides heavy demand for the US currency from importers and persistent capital outflows, a weak trend at the domestic equity market weighed on the rupee. However, the dollar’s weakness against some currencies overseas, capped what could have been further more losses.
The depreciating rupee also impacted the markets as 30-share Sensex nosedived by 481.19 points or 1.96 per cent by the afternoon, its lowest level since May 16, 2014 (intra-day). The gauge had rallied by 291.47 points yesterday.
All the sectoral indices, led by metal, power, reality, PSU, banking and oil & gas were trading in the negative zone with losses up to 3.67 per cent.
According to the traders, persistent outflow of foreign funds and sustained selling by retail investors dampened trading sentiments. Further, weak trend in Asian markets on renewed worries over global slowing economic growth and falling oil prices too added to the fall.
IMF too has trimmed its forecast for the growth in 2017 to 3.6 per cent, down from 3.8 per cent three months ago. Earlier, in a quarterly update to its World Economic Outlook yesterday, IMF had said the global economy will expand 3.4 per cent in 2016, down from an earlier estimated 3.6 per cent in October.
(With inputs from the PTI)