Mumbai, December 16Fears of a slowdown in the global economy, decreasing crude oil prices and a widening trade deficit led to an across-the-board sell-off in the market, pulling the benchmark share indices down to a seven-week low.

The Sensex slumped 538 points to close at 26,781 (minus 1.97 per cent) on Tuesday. The Nifty closed 152 points lower at 8,068 (1.85 per cent down). In all ₹6,29,793 crore in market capitalisation has been eroded in the last eight trading sessions.

Markets fluctuated heavily and the volatility index, India Vix, closed 16.32 per cent up, at 16.3075.

“The markets fell sharply on the back of weakness in global markets and commodities, especially crude oil. The depreciation of the rupee had a negative sentimental impact, we believe,” said Dipen Shah, Head of Private Client Group Research at Kotak Securities.

Going ahead, the decision of the US Federal Reserve will be the immediate trigger. Apart from this, crude prices will continue to have a bearing on sentiments, he added. The rupee fell to about 63.54 to the dollar in the spot market, trading close to yearly lows. According to Sugandha Sachdeva, AVP , Metals, Energy & Currency Research, Religare Securities: “The correction witnessed in domestic equities and anticipation of an interest-rate hike in early 2015 in the wake of a strengthening US economy, ahead of the upcoming US FOMC (Federal Open Market Committee) meeting, are further fuelling the fall in the domestic unit.”

Foreign portfolio investors sold net equities worth ₹1,247 crore while domestic institutional investors bought net equities amounting to ₹535 crore.

Retail investors on the BSE also offloaded net equities worth ₹111 crore on Tuesday.

Mid-cap and small indices also shed in excess of 2.5 per cent as did all sectoral indices, barring Information Technology.

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