Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.

Portfolio

Loading...
Select Portfolio and Asset Combination for Display on Market Band
Select Portfolio
Select Asset Class
Show More
Download ET MARKETS APP

Get ET Markets in your own language

DOWNLOAD THE APP NOW

+91

CHOOSE LANGUAGE

ENG

  • ENG - English
  • HIN - हिन्दी
  • GUJ - ગુજરાતી
  • MAR - मराठी
  • BEN - বাংলা
  • KAN - ಕನ್ನಡ
  • ORI - ଓଡିଆ
  • TEL - తెలుగు
  • TAM - தமிழ்
Drag according to your convenience
ET NOW RADIO
ET NOW
TIMES NOW

Why Sensex crashed 760 points: Global selloff, rupee & other factors

ETMarkets.com|
Updated: Oct 11, 2018, 05.32 PM IST
0Comments
BSE-building-1----AP
Sustained outflow of funds by foreign institutional investors (FII) continued to pressured domestic equity markets.
Indian stocks fell off the cliff on Thursday right at the start, as benchmark indices plunged over 2 per cent on a deepening global selloff.

The BSE Sensex tanked 759.74 points, or 2.19 per cent to 34,001.15 while its NSE counterpart Nifty50 closed the day at 10,234.65, down 225.45 points, or 2.16 per cent.

Here are the key factors that gave domestic stock market a big jolt on Thursday:

Weak global cues
Heavy losses in the US market affected market sentiment in the beginning. Asian stock markets plunged following the worst session on Wall Street for months as US President Donald Trump said the Federal Reserve had “gone crazy” with plans for higher interest rates.

Shanghai shares tested their lowest since late 2014 while China blue chips slid 3 per cent. US stocks took a hit on Wednesday as investors, fearful that rising interest rates and trade tensions could hurt company profits, ramped up their selling of high-flying technology and Internet stocks. The Dow Jones Industrial Average index cracked 831 points, its worst loss in eight months.

Rupee hurtling towards 75
The rupee on Thursday inched closer to 74.50 against the dollar on account of buying in the American currency by banks and exporters. After opening 10 paise down at 74.31 against dollar, the local currency hit its fresh record low of 74.46.

The dollar remained steady against a basket of currencies after nervous investors drove US stocks to their worst fall in nearly eight months overnight.

Madhavi Arora, Economist, FX and Rates, Edelweiss Securities, earlier this week had said, “We expect the rupee weakness to persist, heading towards 75 plus levels against the US dollar amid difficult global and domestic environment, unless some additional assertive policy steps come through. Even as we see a less probability of any unconventional policy measures amid comfortable FX war chest, we do not fully rule it out if the rupee remains volatile and an EM outlier in fragile FX space.”

Heavy selling by FIIs
Sustained outflow of funds by foreign institutional investors (FII) continued to pressure domestic equity markets. After selling shares worth Rs 10,824 crore in September, FIIs net sold shares worth of Rs 14,097 crore in just seven trading sessions so far in October.

Himanshu Srivastava, Senior Analyst Manager (research) at Morningstar, told PTI that for FPIs, India is just another investment in their portfolio. "They continuously evaluate India against other comparable markets and see what investment proposition it has to offer. They will not hesitate in trimming their exposure to India if it does not fare well on the risk-reward profile," he added.

"Hence, due to deteriorating macro factors and increasing tension over global trade war, FPIs have been trimming exposure to India over the last few months," he said further.


0Comments

Also Read

Why Sensex crashed over 800 points: Rupee, oil and three other factors

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Loading
Please wait...