Sensex Tanks 642 points, Banks Bleed
Rampant across-the-board selling led the BSE S&P Sensex to close 642 points or 1.7 per cent down to 36,481 while the Nifty 50 slid by 186 points to 10,818.
At the National Stock Exchange, all sectoral indices were in the red with Nifty auto down by 3.8 per cent, realty by 3.7 per cent, PSU bank by 3.6 per cent and metal by 2.6 per cent.
Shares of State Trading Corporation (STC) and Metals & Miners Trading Corporation of India (MMTC) plunged by 19.6 per cent and 16.5 per cent respectively following reports that the Ministry of Commerce and Industry has decided to close down the state-owned trading firms.
But sectorally, auto stocks suffered the most with Hero MotoCorp skidding by 6.2 per cent, Tata Motors by 4.9 per cent, Maruti by 4.6 per cent, Eicher Motors by 3.3 per cent and Bajaj Auto by 3 per cent.
Banking stocks too were under pressure with Axis bank down by 4.6 per cent, State Bank of India by 3.7 per cent and IndusInd Bank by 3 per cent.
Market sentiment has been weak since two Saudi Aramco plants at the heart of the kingdom’s oil industry, including the world’s biggest petroleum processing facility, were attacked by drones on September 14.
India’s current account and fiscal deficit could take a hit if oil prices continue to rise after the attack, RBI Governor Shaktikanta Das had said on Monday.The attack on the two plants — Abqaiq oil processing facility and Khurais oil field — resulted in a temporary shortage of 5.7 million barrels per day which is 5 per cent of the global crude supply or 50 per cent of the kingdom’s oil output.
The Indian rupee has also weakened sharply and moved towards Rs 72 against the US dollar amid rising demand for the greenback vis-a-vis other currencies overseas and concerns over soaring crude prices following the drone attacks.
Global markets also turned cautious ahead of the two-day meeting of US Federal Open Market Committee. Many experts said the Fed may cut interest rate by 25 basis points.
Meanwhile, oil traded in the negative on Tuesday in Asia as it partly erased yesterday’s gains as investors awaited updates regarding the resumption of operations in Saudi Arabia. Brent crude, the international benchmark, fell 0.96 per cent to 68.39 dollars per barrel.
Asia markets were mixed in the trade as investor sentiment remained cautious with China’s Shanghai falling by 1.7 per cent and Hong Kong’s Hang Seng declining by 1.2 per cent.