European cues dent markets, Sensex down over 600 points

Weak European cues, dwindling rupee value coupled with anxiety over the upcoming derivatives expiry eroded investors' confidence at the Indian equity markets, causing a barometer index to provisionally close over 600 points or 2.30 percent down on Tuesday.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) had previously closed flat. It ended Monday's trade down 25.93 points or 0.10 percent at 26,192.98 points.

On Tuesday, similar subdued sentiments were observed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It declined by 185 points or 2.32 percent at 7,792.15 points.

The S&P BSE Sensex, which opened at 26,274.37 points, provisionally closed at 25,589.27 points (at 3.30 p.m.), down 603.71 points or 2.30 percent from the previous day's close at 26,192.98 points.

The Sensex touched a high of 26,339.10 points and a low of 25,587.40 points in the intra-day trade.

Market observers' cited weak European cues, especially after the re-elections in Greece, dwindling rupee value and the upcoming derivatives expiry, as the main reasons for the markets' fall.

"In absence of any major domestic trigger, the markets looked towards international cues. The weak cues coming in from European markets led the downfall," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

"Investors were reluctant to chase higher prices, given the upcoming F&O (futures and options) expiry. There was also anxiety over whether or not the Reserve Bank of India (RBI) will go in for a rate cut."

The RBI will decide on whether or not to cut interest rates in its upcoming monetary policy review slated for September 29.

Sector-wise, banking, capital goods, metal, automobile and oil and gas stocks came under intense selling pressure.

The S&P BSE banking index plunged by 611.60 points, capital goods index plummeted by 485.23 points, metal index receded by 308.98 points, automobile index declined by 304.84 points, and oil and gas index fell by 111.21 points.