Weak European cues dent markets, Sensex down over 1.60 percent

Mumbai, Sep 22 (IANS) Weak European cues, dwindling rupee value coupled with anxiety over the upcoming derivatives expiry eroded investors’ confidence at the Indian equity markets, causing a barometer index to plunge more than 1.60 percent during the mid-afternoon session on Tuesday.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) had previously closed flat. It ended Monday’s trade down 25.93 points or 0.10 percent at 26,192.98 points.

On Tuesday, similar subdued sentiments were observed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It declined by 137 points or 1.72 percent at 7,840.25 points.

The S&P BSE Sensex, which opened at 26,274.37 points, was trading at 25,765.03 points (at 2.30 p.m.), down 427.95 points or 1.63 percent from the previous day’s close at 26,192.98 points.

The Sensex touched a high of 26,339.10 points and a low of 25,701.16 points in the intra-day trade so far.

Market observers’ cited weak European cues, especially after the re-elections in Greece, dwindling rupee value and the upcoming derivatives expiry, as the main reasons for the markets’ fall.

“There is an absence of any major domestic trigger. The weak cues coming in from European markets are leading the downfall,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

“Investors are reluctant to chase higher prices, given the upcoming F&O (futures and options) expiry. There is also anxiety over whether or not the Reserve Bank of India (RBI) will go in for a rate cut.”

The RBI will decide on whether or not to cut interest rates in its upcoming monetary policy review slated for September 29.

Sector-wise, banking, capital goods, automobile, metal and oil and gas stocks came under intense selling pressure. However, consumer durables stocks managed to stay afloat.

The S&P BSE banking index plunged by 461.83 points, capital goods index plummeted by 355.85 points, automobile index receded by 239.37 points, metal index declined by 236.77 points, and oil and gas index fell by 130.44 points.

The S&P BSE consumer durables index was higher by 28.67 points.

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