Sensex plunges 400 points, Nifty below 7,950

Benchmark indices continued to trade lower in afternoon trades with the Sensex down 400 points and Nifty cracking almost 100 points after Asian markets were defensive over strengthening US dollar since Donald Trump's win could accelerate fund outflows from emerging markets. Back home, investors continued to gauge the impact of demonetisation on the economy. 

The S&P BSE Sensex breached its crucial 26,000 level falling as much as 373 points at intra-day trade after rising more than 120 points in morning deals on Monday. The index was dragged down by Tata Steel, SBI, Adani Ports and Tata Motors. 

Nifty pared all gains and fell below 8000 for first time since June 24 after reclaiming its 8,100 weighed down by losses in bank, realty, pharma and auto sectors. 

 

At 15:00 pm, the S&P BSE Sensex was trading at 25,749, down 401 points, while the broader Nifty50 was ruling at 7,927, down 147 points. Broader market underperformed the headline indices with BSE Midcap and BSE Smallcap index down 2% each.
 
The India Volatility Index (VIX), a gauge of the market's short-term expectation of volatility, surged 8% to 19.5975.
 
Rupee and FIIs

Meanwhile, Rupee was hovering aroung it's Brexit lows to 68.23/$. It hit its lowest level since June 1against dollar as sentiment turned bearish on combination of growing US rate hike expectations and stunning dollar run.
 
FIIs and FPIs sold equity shares worth over $1 billion in the past six trading days after the government demonetised Rs 500 and Rs 1000 currency notes. The huge selling by overseas investors has dragged the benchmark S&P BSE Sensex and Nifty50 stock indices down nearly 6% each during the same period.

 
Stocks and sectors
 
Realty was the top sectoral loser in both the headline indices and lost over 4% led by losses in Unitech, DLF falling around 6% each. Oberoi Realty fell 5%.
 
BSE Bankex as well as Nifty Bank fell more than 2.5% as investors continue to fear increasing foreign outflows from emerging markets. SBI (4.23%), ICICI Bank (2.29%), Axis Bank (1.51%) were the top draggers for the index on BSE.
 
Bank of Baroda was the worst-performing stock, down 7.21%% on Nifty, while  Tata Steel cracked 4.66%, making it the top loser on Sensex.
 
Except IT, all other sectors were trading in red. Wipro, TCS and Infosys were the top performers on Sensex.

 
India Cements gained 3% after the company reported a 62% jump in standalone net profit at Rs 62.41 crore in the September quarter. It had posted a net profit of Rs 38.50 crore in the year-ago period.  

Global Markets

Asian shares were on the defensive on Monday, undermined by fears that the strength in the US dollar and rising US bond yields since Donald Trump's election to president could accelerate fund outflows from the region back to U.S. markets.

Asian markets were steady to slightly lower, with Hong Kong's Hang Seng flat, Australian shares down 0.2% and South Korea's Kospi falling 0.3%.

But Japan's yen-sensitive Nikkei bucked the trend, rising 0.8% to hit a 10 1/2-month high, thanks to the weaker yen.

European shares were expected to gain, with spread-betters seeing a rise of 0.2 percent in Germany's DAX and Britain's FTSE.

Trump's unexpected election victory has led to a major repricing of assets, with investors rushing to buy U.S. stocks and the dollar, while dumping bonds and emerging market assets.

(With inputs from Reuters)