Breaking a three-day rising trend, the >Sensex today tanked 317 points, the biggest single-day fall in nearly nine months, on all-round selling amid weak global cues. The BSE benchmark tumbled 317.39 points, or 1.62 per cent, while the >Nifty closed at 5,852, down 91 points.
The market players, according to Dipen Shah, Head — PCG Research, Kotak Securities, were spooked by the fear that the US Federal Reserve will withdraw the monetary stimulus, raising fears over fund flows across asset classes, including emerging markets. Indian markets have received substantial FII funds over the past few months and any reversal can make markets vulnerable, he added.
“The markets turned distinctively weak today and closed at the lowest levels in 2013.,” said Dipen Shah. The market also turned volatile, with the volatility index India Vix climbing nine per cent to close at 16.94.
While foreign institutional investors were net buyers of Rs 1,214 crore worth equity, domestic institutions offloaded equity worth Rs 229 crore. Retail investors on the BSE were buyers for Rs 42 crore, net.
In the across-the-board dip, Jindal Steel, Tata Steel, R-Infra, Sesa Goa and ICICI Bank led the losers’ pack. Cipla and SunPharma were the only Nifty gainers, while GAIL remained unchanged.
GOLD DOWN
The worry that the >US Fed will go slow on the stimulus (Quantitative Easing – 3) and with no signs of recovery of the European economy bullion and other metal prices too dipped.
In the Mumbai spot market, both standard and pure gold fell by Rs 225 each to Rs 29,220 and Rs 29,355 per 10 grams. Silver was down Rs 960 to Rs 54,735 a kg. The yellow metal has been falling since the start of this month, bouncing back now and then, and dipped below Rs 30,000 earlier this week.
In the commodity futures market, gold for April delivery sank to the day’s low of Rs 29,263 but recovered to close at Rs 29,472.
In Comex, the commodity division of the New York Mercantile Exchange, the yellow metal plunged by $26 to a seven-month low of $1,578 a troy ounce.
Sushil Sinha, Director, Karvy Commodity, said bullion markets across the globe were impacted by the debate over the rollout of the Fed’s stimulus package. Last September, the US Federal Reserve policy makers committed to buy $40 billion worth of securities every month.