Fears of an impending rate hike by the US Federal Reserve dragged the Indian equity market to its biggest single-dayloss since Brexit was announced on June 24. Weak global cues, profit-booking and a weak rupee further dampened sentiment.
The Nifty shed 1.7 per cent to close at 8,716,while the Sensex slid 1.54 per cent (444 points) to close at 28,354. Shreyash Devalkar, Fund Manager – Equities, BNP Paribas Mutual Fund, said: “Spooked by the prospects of an ‘earlier than expected’ interest-rate hike by the Federal Reserve in the US and global nervousness following a nuclear test by North Korea, indices across the globe registered sharp losses,” said Shreyash Devalkar,
FundManager–Equities,BNPParibas Mutual Fund. “Further pressure on the US equity markets came after Boston Fed President Eric Rosengren said that the US central bank faced increasing risks if it waited too long to raise rates.”
Earlier, US Fed chief Janet Yellen had indicated that the case for increasing rates had strengthened in recent months. Though Yellen did not indicate how soon the rates would be increased, all eyes are onthe Fedmeeting nextweek.
FPIs sold net equities worth ₹594 crore,while DIIs also shorted net equities worth ₹13 crore. Retail investors on the BSE bought equities worth₹214 crore.
Barring Nifty IT, all sectoral indices closed in the red. Volatility was high and the volatility index IndiaVix closed at 15.2400, up15.19 per cent. Heavy selling pressure was witnessed in realty, metal, capital goods, industrial, utilities, banking and power stocks, while IT and technology stocks were among the gainers onBSE.