Falling crude price and weakening global sentiments hit Indian bourses hard on Wednesday with the benchmark indices sinking to 20-month lows. Coinciding with this, the rupee breached the 68/$ mark, the lowest level since September 2013, before closing at 67.96.
The slump comes on the back of the International Monetary Fund slashing its global growth forecasts for the third time in less than a year. The S&P BSE Sensex slipped below the psychologically important level of 24,000 intraday amid a fresh, panic selloff across global markets, which dropped 1-4 per cent. The Nifty 50 and the Sensex fell 1.7 per cent each to 7,309.3 and 24,062.04 points, respectively.
US stocks sank more than 2 per cent early Wednesday, with petroleum stocks diving, joining Asia and Europe in a sell-off prompted by sliding oil prices and worries about lower growth. The Dow Jones Industrial Average was down 428.81 points at 15,587.21 in early trade.
Market experts had been hoping for a bull run this year, with the economy improving relative to other emerging economies.
However, foreign institutional investors are not buying into the India growth story and continue to press the sell button. On Wednesday, FIIs sold ₹1,325 crore; they have pulled out ₹8,471 crore from the Indian equity market so far in 2016.
All the indices on the NSE ended in the red, with Nifty PSU bank, Nifty Realty and Nifty Metal being the top three losers. Vedanta, Hindalco Industries, Adani Ports and Special Economic Zone, Punjab National Bank and State Bank of India were the top five losers in the Nifty 50. India VIX, which measures the market’s expectation of volatility in the near term, jumped 13.75 per cent to 20.9650.
Once market favourites, mid- and small-caps are taking a beating. Nifty Midcap 100 and Nifty Smallcap 100 declined 1.8 per cent and 2.37 per cent, respectively, today.