Investors lose Rs 4 lakh crore in 2 days as Sensex slumps nearly 1,000 points
The Sensex has fallen 976 points in the two-day selloff and investors money worth nearly Rs 4 lakh crore has been wiped off
Indian markets suffered a selloff today, extending a sharp fall from the previous session, as the rupee hit another record low. The Sensex slumped 509 points today to end at 37,413, wiping off Rs 2.13 lakh crore off the market value of stocks listed on BSE. This takes the two-day losses in Sensex to 976 points and investors money worth nearly Rs 4 lakh crore was wiped off. Asian and European stocks were weak today as an escalation in the US-China tariff dispute continued to haunt investors in global markets. The Nifty gave up the 11,300 mark today, before settling at 11,287, down 150 points. FMCG, metal, banking and auto stocks led the decline today in Indian markets. Titan, Tata Steel, ITC, Tata Motors and Power Grid were among the top losers in Nifty50 index, down between 3% and 4.5%.
10 things to know about the selloff in Sensex and Nifty today:
1) Though there are expectations of earnings revival after GDP growth topped 8% in the June quarter, lingering external risks, most notably from the price of oil - and its impact on the rupee - and stretched valuations are giving some investors pause.
3)“The weak rupee remains an overhang on earnings growth outlook and stretched valuations,” said Soumen Chatterjee, head of research at Guiness Securities.
4) Expectations are rising that the RBI could raise interest rate in the October meeting in the wake of rupee’s sharp fall and higher crude prices.
5)”There is fear that rising crude prices, weakening of the rupee will cause inflation to go up and in that case, RBI (Reserve Bank of India) is bound to raise interest rates by 25 bps (basis points) in the October meeting,” said R.K. Gupta, managing director at Taurus Asset Management.
6)Some investors may choose to book profit before the second-quarter advance tax payment deadline (15 September), and markets may also see correction due to impending state elections in four states in November, Gupta added.
7)The relentless slide in rupee has analysts rushing to rework their forecasts.
8)The rupee, which is down about 13% so far this year, hit another new low of 72.74 against the US dollar today. The rupee ended at 72.70 a dollar, down 0.34% from its Monday’s close of 72.45.
9)DBS Bank said it expects sustained pressure on the rupee with factors such as higher oil prices, widening current account deficit and the U.S. Federal Reserve’s rate hike cycle likely pushing it towards 75 per dollar levels.
10)The selling pressure in Indian markets was broad-based with all the sectoral indices on the BSE ending in the red. Just six stocks among the 50 stocks in Nifty50 index managed to end in the green. Among financials, ICICI Bank, HDFC Bank and Yes Bank declined over 2%.
With agency inputs
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