Taking cues from other Asian equity markets and weighed down by an across-the-board selloff, the benchmark indices fell over 1% on Tuesday.
The Sensex remained under selling pressure throughout the session and closed 1,064 points, or 1.30%, lower at 80,684.45, marking its second consecutive day of decline. Similarly, the NSE Nifty fell 332.25 points, or 1.35%, to end the day at 24,336.
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“Weak Asian cues weighed on market sentiment, while the record trade deficit in November pushed the rupee to a new low, triggering panic selling in domestic equities,” said Prashanth Tapse, senior VP (Research), Mehta Equities.
All major Asian markets ended in the red on Tuesday, a day ahead of the US Federal Reserve’s meeting outcome. Besides India, equity markets in the Philippines, Thailand, Indonesia and South Korea recorded losses of over 1% each. China, Malaysia and Singapore indices were down 0.73%, 0.59%, and 0.55%, respectively, while Hong Kong fell 0.48% and Japan 0.24%.
“In global markets, concerns persist that the US Fed might signal a pause or slowdown in the pace of rate cuts, coupled with a cautious outlook for upcoming policy meetings. While a 25 basis points rate cut is widely expected on Wednesday, the commentary will be closely watched,” said Devarsh Vakil, deputy head of Retail Research, HDFC Securities.
Foreign portfolio investors (FPIs) were net sellers of equities worth Rs 6,409.86 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 2,706.48 crore, according to provisional exchange data.
Sectorally, telecom, banking, metal, auto, and oil & gas were the top losers. Banking stocks were a major drag on the indices, with the Bank Nifty closing 1.5% lower. The liquidity deficit in the Indian banking system hit its highest level in nearly six months due to advance tax payments by companies and likely dollar sales by the central bank to curb rupee volatility.
All 30 Sensex constituents ended in the red, while on the Nifty 50, only Cipla (up 0.14%) and ITC (up 0.13%) managed to stay positive. Bharti Airtel, IndusInd Bank, JSW Steel and TCS were the top Sensex losers, falling over 2% each.
The overall market breadth was negative,
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