Mumbai, Feb 11 (IANS) Less-than-expected earning results, combined with negative European indices and a weak rupee dragged the Indian equity markets to their lowest levels in over 21 months on Thursday.
Bearish sentiments led a barometer index of the Indian equity markets to provisionally close the day’s trade down 807 points.
Indian equity markets continued to decline for the fourth consecutive session amid weakness in the European indices.
Selling frenzy by foreign investors led both the bellwether indices of the Indian equity markets to provisionally close at their lowest levels in over 21 months. The bellwether indices touched new 52-week lows during the intra-day trade.
The Indian VIX (volatility index) ended higher by 15.5 percent, portending to sustained volatile trading sessions.
Initially, both indices opened on a weak note, following Wednesday’s decline in the US markets and a steep fall in the Japanese index.
The selling pressure was accelerated by the absence of any fresh positive trigger and below expected third quarter (Q3) results by the likes of banking major, State Bank of India (SBI).
The decline of crude oil prices below $30 a barrel (one barrel is equal to 159 litres) kept sentiments subdued.
Investors’ doubts over the central government’s ability to perk up investments dragged the markets lower.
In addition, a weak rupee unnerved investors. It opened lower at 67.95 to a US dollar from its previous close of 67.84 to a greenback.
The weakness in the rupee indicated massive flight of foreign funds from the equity markets. The foreign institutional investors (FIIs) were net sellers on Wednesday; they divested Rs.606.83 crore.
Investors’ confidence was further eroded by hawkish comments made by US Fed chairman Janet Yellen to the US House Financial Services Committee late Wednesday.
During her semi-annual monetary policy testimony to the committee, Yellen said that the US is unlikely to go in for a stimulus and that the rate hike cycle will continue.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) plunged by 807 points or 3.40 percent.
It has lost over 858.07 points or 3.61 percent in the last three sessions.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended deep in the red. It was down by 239.35 points or 3.32 percent at 6,976.35 points.
The NSE Nifty touched a new 52-week low at 6,959.95 points. Nifty traded at its lowest levels since early May, 2014.
It has slid by 273.4 points or 3.78 percent during the last three days trade.
The S&P BSE Sensex, which opened at 23,758.46 points, provisionally closed at 22,951.83 points (3.30 p.m.) — down 807.07 points or 3.40 percent from the previous day’s close at 23,758.90 points.
During the intra-day trade, the Sensex touched a high of 23,758.46 points and a low of 22,909.12 points — its new low in 52 weeks.
The BSE market breadth favoured the bears — with 2,350 declines and only 333 advances.