Sensex sheds 324 pts on Fed rate hike hints
22 Aug 2015 4:31 AM IST
The stock market found itself at the receiving end of a sharp global sell-off in equities and currencies on Thursday as the benchmark BSE Sensex tanked 324 points to end the day at 27,607.82. Minutes of US Fed's July meeting suggested that the officials were in broad agreement that the economy is nearing a point which calls for a rate "lift-off", which added to the anxiety level.
European shares were ruling markedly lower over concerns about <g data-gr-id="30">gloomy</g> outlook of global economies. The rupee fell to almost a two-year low of 65.50. Emerging market currencies fared no better as Turkish Lira and South African Rand went downhill. Commodities took a blow as Brent fell 1.59 <g data-gr-id="28">per cent</g> to $46.41 in the global market. Metal prices too came under pressure and melt.
Positive comments from RBI Governor Raghuram Rajan that Indian economy is showing signs of a pick-up failed to lift <g data-gr-id="32">mood</g>. The 30-share index resumed higher, but slid thereafter on intense selling, settling at 27,607.82, down 323.82 points, or 1.16 <g data-gr-id="26">per cent</g>. As many as 26 in the Sensex pack ended with losses.
The NSE Nifty slumped below the 8,400-level, tumbling 122.40 points, or 1.44 <g data-gr-id="25">per cent</g>, to close at 8,372.75. This is Nifty's biggest single-day percentage fall since July 27. Intra-day, it hovered between 8,501.35 and 8,359.
"Sharp sell-off was witnessed across the globe after the release of FOMC minutes, which suggest that Fed can hike rate in September. Continuous fall in commodity prices, rupee weakness, sell-off by foreign portfolio investors and profit booking dampened sentiment of investors," said Gaurav Jain, Director, Hem Securities.
Vedanta took the maximum battering, which plunged 4 per cent, followed by Axis Bank. RIL, <g data-gr-id="27">Bhel</g>, Tata Steel, GAIL, SBI and Infosys were among those which lost too.
Rs retreats 27p to 2-year low of 65.54 against $
The rupee fell back sharply by 27 paise to end at a new two-year low of 65.54 against the US dollar following renewed demand for the American currency from banks and importers. Sharp sell-off in global currency and financial markets predominantly pressurised the rupee to retreat after a brief rebound, but the greenback’s weakness against other currencies overseas restricted the fall, forex dealers said.
Gold, silver hit 1-1/2 month high on global cues
Gold bounced back sharply to over one-and-half month highs on investors offtake following a spike in international markets. Silver also witnessed a speculative jump after its overnight slump <g data-gr-id="47">to reclaim</g> 36,000 per kg level. Globally, the yellow metal hits its highest in nearly five weeks in early European trade after meeting minutes from the US Federal Reserve suggested policymakers were in no hurry to raise interest rates, as the lagging inflation and weak global economy posed risks too big to commit to a rate hike.
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