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Red Dawn on Dalal Street as Sensex Slumps 1,000 Points, Nifty Below 10,200-Mark

Mumbai: Markets opened in deep red on Thursday with the benchmark BSE Sensex down 1,000 points and the Nifty below the 10,200-mark.

In yet another blow, the rupee hit an all-time new low of 74.45 against the US dollar.

#CNBCTV18Market | #RUPEE AT RECORD LOW AGAINST THE US DOLLAR pic.twitter.com/9kOfAitjZc

— CNBC-TV18 (@CNBCTV18Live)

October 11, 2018

Other Asian markets also plunged on Thursday morning following the worst session on Wall Street for months, further aggravated by US President Donald Trump’s “the Federal Reserve has gone crazy” remarks.
The benchmark Nikkei 225, the Hang Seng in Hong Kong and the Shanghai Composite all plummeted more than three percent in early morning trade, as investors fretted about surging interest rates and an ongoing trade war.

The steep drop in Asia followed a decline on Wall Street of nearly 830 points, the biggest fall since February, amid Trump’s latest criticism of the Federal Reserve, the US central bank. “I think the Fed is making a mistake. It’s so tight. I think the Fed has gone crazy,” Trump told reporters as he arrived for a campaign rally ahead of the US mid-term elections.

#GlobalSellOff | Financials drag nifty by more than 100 points. All sectoral indices trade with cuts#CNBCTV18Market pic.twitter.com/1HaTMxeGNt

— CNBC-TV18 (@CNBCTV18Live)

October 11, 2018

On Wednesday, the benchmark indices staged a strong comeback after the recent rout as investors accumulated battered financials, auto and metal stocks amid rupee recovery from record lows. The rupee snapped its six-session losing streak to end 18 paise higher at 74.21 against the US dollar after the American currency weakened overseas.

At the Interbank Foreign Exchange (Forex), the domestic unit opened higher at 74.18 and advanced to 74.05 on fresh dollar selling by exporters amid weakness in the greenback against some currencies overseas. However, the rupee erased some gains and finally settled for the day at 74.21 — up by 18 paise, registering its first rise after sixth straight sessions of losses.

On Tuesday, the rupee tumbled 33 paise to finish at a fresh lifetime low of 74.39 against the US dollar. Traders said a relief rally in domestic equity markets also boosted sentiment.

The BSE Sensex on Wednesday settled for the day at 34,760.89, higher by 461.42 points, or 1.35 per cent. The broader Nifty too reclaimed the key 10,400 mark. It finished at 10,460.10, showing a significant gain of 1.54 per cent.

Traders had said that RBI’s decision to inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet the festival season demand for funds supported the recovery in rupee.

Sentiment also got a lift after the SBI, coming to the rescue of cash-strapped NBFCs, Tuesday decided to buy their assets to the tune of Rs 45,000 crore, a move that will provide liquidity support to non-banking financing companies (NBFCs) facing headwinds after a series of loan defaults by IL&FS group firms.

Meanwhile, domestic institutional investors (DIIs) bought shares worth Rs 1,526 crore, while foreign institutional investors (FIIs) pulled out a net Rs 1,242 crore on Tuesday, as per provisional stock exchange data.

The FBIL set the reference rate for the dollar at 74.1316 per dollar. The reference rate for euro was fixed at 85.2637 and for the British pound at 97.6284. The reference rate for 100 Japanese yen was 65.60.

| Edited by: Sumedha Kirti

Source: News18

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