Indian stock markets ended sharply lower on Tuesday, with Sensex plunging nearly 600 points and the Nifty falling below the 5300 level, as sentiment was weighed down by weak rupee which has hit a new all-time low against the US dollar.
The benchmark BSE Sensex tumbled 3.18 percent, or 590.05 points, to 17,968.08. The 50 share NSE Nifty slumped 3.45 percent, or 189.05 points, to 5,287.45.
Markets opened on a weak note, tracking negative cues from Asian peers and Wall Street overnight. Sensex has snapped three day winning streak and lost nearly 600 points in afternoon trade as weak rupee coupled with the Fed tapering fears weighed on the investor sentiment.
The Indian rupee plunged to a new record low of 66.08 against dollar by late-afternoon trade on Tuesday. The rupee had hit its earlier all-time low of 65.56 on last Thursday. Indian rupee has lost nearly 19 percent in the last four months on concerns that the government will struggle to fund its record high current account gap if global liquidity tightens.
“The rupee is likely to continue to be under pressure given rising gold and oil prices. Any major dip in the dollar-rupee exchange rate should be seen as a buying opportunity for the pair given lack of sufficient measures that would turn around India’s weak fundamentals,” Dariusz Kowalczyk, a senior economist at Credit Agricole CIB in Hong Kong, said in an e-mail interview to Bloomberg.
All the 13 BSE sectoral indices except IT experienced selling pressure and ended sharply lower. Banking sector tumbled 5.34 percent and capital goods slumped 4.71 percent, while power sector declined 4.51 percent and IT sector gained 0.16 percent.
The overall market breadth is negative with 721 advances against 1536 declines on the BSE.
Meanwhile, Asian markets ended lower on Tuesday as sentiment was weighed down by concerns surrounding potential US military intervention in Syria. US Secretary of State John Kerry called Syria’s actions ‘inexcusable’ and suggested that the Obama administration was edging closer to a military response.
Japan’s Nikkei declined 0.69 percent and Hong Kong’s Hang Seng fell 0.59 percent, while South Korea’s KOSPI slipped 0.11 percent and China’s Shanghai Composite gained 0.34 percent.