Shares of BEL, Mahindra & Mahindra, Titan, NTPC and State Bank of India were among the top of the 30-stock Sensex, falling between 1.7% and 2%. The Sensex and Nifty have now fallen 0.9% and 0.7% respectively in four sessions since hitting record highs on November 27.The pressure mounted as the rupee breached the 90 per dollar mark to a new all-time low, weighed down by continued foreign fund outflows. Broader markets also softened, with midcaps losing around 1% and smallcaps down almost 0.7%.
IT stocks, on the other hand, outperformed, rising 0.8% as the sector received support from the weaker rupee, boosting dollar-denominated gains for most tech exporters.
Expert views
Indian stocks continued to consolidate as the rupee fell to a record low, weighed down by foreign currency outflows and lingering trade uncertainties, said Vinod Nair, head of research at Geojit Investments. He added that industrial activity declined in November, with the manufacturing PMI indicating slow new orders, weaker export demand and a spike in the trade deficit.
“Global markets were mixed as investors anticipated Fed and ECB monetary policy and currency volatility, while sentiment remained cautious following a jump in Japanese bond yields on expectations of BoJ tightening and higher government spending. The RBI’s policy decision this week will be crucial, especially for banks, as the chances of a rate cut have diminished following strong second quarter GDP data,” Nair said.
Global markets
Global markets held steady on Wednesday, finding support from an overnight recovery on Wall Street as the sharp sell-off in bonds and cryptocurrencies briefly subsided. Bitcoin reclaimed the $90,000 mark to hit a two-week high, while Nasdaq and S&P 500 futures rose 0.2% each.
European markets looked firmer, with EUROSTOXX 50 futures up 0.3% and FTSE futures 0.1% higher, signaling a calmer session after a turbulent start to the week. A sudden shift in expectations for a possible rate hike in Japan had sparked a global bond crisis and accelerated the decline of crypto assets, dragging down stock prices.
In Asia, sentiment was mixed. Japan’s Nikkei rose 1.5%, but the MSCI Asia-Pacific ex-Japan index fell 0.12%, pressured by continued weakness in Chinese shares. The CSI300 lost 0.26% and Hong Kong’s Hang Seng fell 1.2% as slowing services activity increased concerns about China’s faltering recovery and the prolonged recession in the real estate sector.
In the field of fixed income, Japan remained the center of attention. Ten-year Japanese government bond yields rose to 1.885%, the highest level since June 2008, while two-year yields rose to 1.015%, further increasing bond market volatility this week.
Rough impact
Oil prices firmed on Wednesday after earlier losses as traders grew skeptical that peace talks between Russia and Ukraine would lead to a quick rollback of sanctions on Russian crude. However, concerns about a persistent global supply glut kept profits in check.
Brent crude rose 26 cents, or 0.4%, to $62.71, while US West Texas Intermediate rose 29 cents, or 0.53%, to $58.95 as of 0816 GMT. Both benchmarks were down more than 1% in the previous session.
Rupee vs dollar
The Indian rupee fell past the psychologically crucial 90 per dollar mark to a new record low on Wednesday, extending an eight-month slide, as weak trade and investment flows and a rise in corporate hedging continued to weigh on the currency. The rupee hit an intraday low of 90.29 before settling at 90.19, down almost 0.4% for the day.
Meanwhile, the dollar index fell 0.15% to 99.10, putting it on track for a nearly 9% year-on-year decline as global investors unwound long dollar positions.
(with input from agencies)
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