Sensex, Nifty fall most in 7 weeks ahead of US Fed policy meet
In their worst single-day drop in nearly 7 weeks, Sensex on Tuesday plunged 324 points and Nifty tanked 109 points on across-the-board selling on caution ahead of the outcome US Federal Reserve's monetary policy meeting.business Updated: Sep 16, 2014 18:18 IST
In their worst single-day drop in nearly 7 weeks, Sensex on Tuesday plunged 324 points and Nifty tanked 109 points on across-the-board selling on caution ahead of the outcome US Federal Reserve's monetary policy meeting.
An earlier-than-anticipated rate hike by Fed after the two-day meeting that starts later Tuesday could lead to outflows, hurting emerging markets as the incentive for investors to chase higher yields becomes smaller.
Major bourses in Asia ended down and Europe was weak in morning trades. Rupee also continued to remain above 61-mark against dollar as domestic indices ended at three-week lows.
Besides, BJP heading for a sharp setback in bypolls appears to have had a bearing on sentiment, say brokers.
All-round selling was seen as all 12 BSE sectoral indices closed in the red, with realty, power, capital goods, refinery, consumer durable, banking and auto segments taking the lead in the downslide.
The 30-share BSE Sensex resumed better but fell back and continued its fall on sustained heavy selling. It settled at three-week low of 26,492.51, a steep fall of 324.05 points or 1.21%. Previously, it had plunged by 414.13 points, or 1.60%, on August 1, 2014.
Tata Power, Tata Steel, Hindalco, NTPC, Tata Motors, ONGC, RIL, GAIL led the 23 laggards in Sensex.
The 50-issue Nifty stumbled by 109.10 points, or 1.36%, to end below 8K-mark at a 3-week low of 7,932.90. This is its worst show since August 1 when it fell 118.70 points.
Smallcap and midcap stocks, which in previous sessions had bucked a weak trend, saw a huge sell-off with their indices falling over 3% each.
"Market players will be looking for clues on the timing of the first US rate hike in more than eight years. Consensus is that the Fed will hike interest rates next year and it may declare the timelines today," said HDFC Securities in a note.
In Asia, barring KOSPI, all major markets ended in the red on Fed rate hike fears and weak China data. Europe saw major benchmarks trading 0.4-0.6% lower.