The bear assault at the BSE pushed 177 stocks to fresh year-lows if not their all-time lows on Tuesday. The benchmark Sensex plunged almost 600 points. In contrast, only 47 stocks have registered their 52-week or record highs.
The S&P BSE Sensex sank 3.2 per cent to 17,968.08 and the NSE Nifty tumbled 3.45 per cent.
Investors lost Rs 11.36 lakh crore in notional wealth in stocks since January-end.
As the selling pressure now pervaded large-cap stocks, blue-chips, including HDFC Bank, HDFC, UltraTech Cement, NTPC and ACC touched their year lows.
Indian stocks have been under pressure as the rupee’s slide continued unabated despite measures taken by from the Government and the RBI. On Tuesday, the rupee breached the 66 level against the US dollar to close at a new low Rs 66.24, as analysts feared the Food Security Bill, which was passed in Parliament on Monday, will further worsen the fiscal deficit situation. Morgan Stanley analysts led by Ridham Desai said in a report that markets do not rise or fall in a straight line, so investors should expect powerful rallies from time to time led by policy action, corrective rally in the US bonds, dollar issuances or strong Chinese data.
“It is unlikely that the world’s reserve currency is returning to fund India’s deficit anytime soon — and hence, in that context, the deficit is now India’s problem. To that extent, the equity market will continue to decouple,” they added. Shares of HDFC Bank tanked 8.04 per cent to close at Rs 560.9, the biggest slide in over four years. HDFC plunged 7.70 per cent to Rs 686.85, the worst since July 2009.
SBI slid 2.4 per cent to Rs 1,520, its lowest level since May 2009 while the S&P BSE Bankex lost 5.3 per cent to its lowest close since January 2012. Except the BSE-IT index, 12 other sectoral indices ended the day in deep red with banking sector taking the biggest hit. “The Government’s approval to the Food Security Bill had an equal and opposite reaction to the markets. The investors concluded that this step will lead to rise in fiscal deficit in the future which made them hit the sell button aggressively. Banks, capital goods and realty stocks were badly hurt today,” said Abhishek Goenka, Founder and CEO, India Forex Advisors.