Mumbai, India (BBN)-The Sensex and Nifty reversed two sessions of gains to end lower on Thursday as the rupee fell to a record low, denting sentiment at a time when investors were already worried about how demonetisation would affect economic growth.
Domestic sentiment was also hit as participants indulged in liquidating positions in view of November month derivatives expiry, reports The Hindu Business Line.
Besides, weak Asian cues as upbeat economic data strengthened the prospects of higher US interest rates weighed on the sentiment.
The broader NSE index fell 67.8 points or 0.84 per cent to end at 7,965.50 – only the second time this month that the index closed below the 8,000-point mark.
The benchmark BSE index ended 191.64 points or 0.74 per cent down at 25,860.17
Among BSE sectoral indices, banking index fell the most by 1.45 per cent, auto 1.34 per cent, realty 1.25 per cent and healthcare 1.03 per cent. On the other hand, IT index was the star-performer and was up 1.23 per cent, metal 1.22 per cent, TECk 0.73 per cent and PSU 0.07 per cent.
Top five Sensex gainers were Power Grid (+1.92%), Bajaj Auto (+1.69%), Tata Steel (+1.5%), TCS (+1.38%) and Infosys (+1.33%), while the major losers were Tata Motors (-3.89%), Axis Bank (-2.59%), Sun Pharma (-2.49%), M&M (-2.41%) and GAIL (-2.18%).
The rupee fell to as low as 68.8375 per dollar, almost surpassing its record low of 68.85 hit in August 2013, as the greenback remained strong over the prospect of higher US interest rates. The local currency, however, rebounded sharply after heavy intervention by the central bank.
The fall in the rupee comes at a time when investors are souring on the government’s shock move to remove high-value notes from circulation, which came on the eve of the unexpected election of Donald Trump as US President.
The NSE index has slumped 6 per cent since the demonetisation announcement on November 8, compared with a fall of 2.8 per cent in the MSCI Asia-Pacific index, excluding Japan .
“The gloom in the market due to the lack of (cash) liquidity is unlikely to ease until February next year,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities.
A report by SMC Global said: “US stocks closed mixed on Wednesday as investors digested a number of economic data, including minutes from the US Federal Reserve’s November meeting. Fed minutes indicate rate hike “relatively soon” and stockpiles of crude oil in the US declined last week, according to new government statistics released Wednesday. New home sales in the US fell by much more than anticipated in the month of October.”
Among other Asian markets, Hong Kong’s Hang Seng shed 0.37 per cent, while Shanghai Composite Index shed 0.11 per cent in early trade. Japan’s Nikkei, however, was up 1.08 per cent.
The US Dow Jones Industrial Average had ended 0.31 per cent higher yesterday.