The BSE Sensex crashed below the crucial 27,000-mark to hit a low of 26,692.35 before settling 257.20 points or 0.95 per cent lower at 26,763.46.
The benchmark Sensex fell nearly 1 per cent, or 257 points, on Thursday, its biggest single-day fall in three weeks, as caution prevailed ahead of the US Federal Reserve meeting, while Infosys slumped on worries about its outlook with high crude oil prices adding to the overall bearishness.
The Sensex resumed lower at 26,994.48 and dropped further to 26,692.35 before finishing at 26,763.46, showing a loss of 257.20 points or 0.95 per cent. The gauge had risen by 243.21 points in the past two days. The NSE 50-share Nifty also dropped by 69.45 points or 0.84 per cent to close at 8,203.60.
Further, there were also concerns that the recent gains in crude oil prices could adversely impact India’s fiscal deficit situation and increase fuel price inflation. Infosys was the worst performer with a plunge of 4.27 per cent at Rs 1,185.45 after the company said challenges in retail, energy and insurance sectors could result in “quarterly bumps”. TCS followed suit and slumped 1.27 per cent.
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Giving up its five-day winning spree against the American currency, the rupee dropped 6 paise to close at 66.71 on fag-end dollar demand from banks and importers on the back of higher crude oil prices amidst fall in the domestic equities. Oil prices extended gains to multi-month highs following another drop in US supplies and the prospect of further disruptions to output from key producer Nigeria. US benchmark West Texas Intermediate rose 32 cents, or 0.62 per cent, to $51.55 a barrel, its highest since July. Brent gained 22 cents, or 0.42 per cent, to $52.73, its highest since October.
Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services, said, “the market tanked as weak European cues and a surge in oil prices have turned investors risk averse. The delay in structural reforms and the deflation risk continues to be an overhang for the European economy, with DAX and CAC down by 1.3 per cent and 0.91 per cent respectively. The fall in US crude oil inventory has provided room for oil to climb, which increases inflationary pressure in India.”
Jayant Manglik, President, Retail Distribution, Religare Securities said: “Equity markets witnessed profit taking on Thursday and lost nearly a per cent. Weak global cues and concern over the rising crude oil prices pushed the index lower initially which further worsened with decline in select index majors as the session progressed. Again, mixed movement on the sectoral front saved the traders’ day by providing opportunities on both side of market.”
Investors also preferred to cut down on their positions ahead of key economic data, industrial production data, due for Friday.
Meanwhile, foreign investors bought shares worth a net Rs 529.16 crore yesterday, as per provisional data.
In Asia, Japan’s Nikkei fell 0.97 per cent while markets in Hong Kong and China were closed for a public holiday.
European shares too were trading lower with indices in France and the UK falling by 0.43 per cent to 0.87 per cent.
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