Sensex drops by 220 points on negative global cues

The BSE Sensex fell over 220 points taking cues from its Asian peers during the afternoon session on Tuesday as the Nifty also slipped below the 10,700-mark, despite both the domestic currency and crude oil prices being in the favourable zone.

"The markets are taking cues from the global markets and hence the negativity.

"With regards to the RBI meeting the markets cheered the fact that the stand off between the government did not escalate. However, it was more or less a status quo," Astha Jian, Senior Analyst, Hem Securities, said.

All the 19 sectors on the BSE came under heavy selling pressure led by the metal counter, which fell by over 2 per cent, while healthcare, IT and TECK (technology, entertainment and media) fell over 1 per cent.

At 1.41 p.m., the S&P BSE Sensex traded 224.17 points lower at 35,550.71 from its previous close of 35,774.88.

The benchmark index touched a high of 35,731.67 and a low of 35,546.91 while NSE's Nifty was trading 81.30 points lower at 10,682.10.

The Indian rupee strengthened significantly for the second day in a row as it traded at Rs 71.38 per dollar, gaining 26 paise against the greenback.

On Monday, it had appreciated 28 paise to closed at Rs 71.64 per US dollar.

The benchmark Brent Crude prices also eased to $66.36 per barrel.

According to analysts, the rupee's recovery was in line with the gains across the emerging market currencies, which bottomed on November 13 and then started to correct upwards.

"Some investors were betting that the rate hike cycle by the US Federal Reserve was petering out and hence the main reason for the weakening of the emerging market currencies may no longer be valid," said Deepak Jasani, Retail Research Head HDFC Securities.

--IANS

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