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Concerns over delays in crucial reforms, including those related to land acquisition and the goods and services tax, spooked the market on Tuesday.
Depressed corporate earnings and weakening global bond markets also added to the bearish sentiments.
As a result, the Nifty crashed 2.38 per cent (198 points) to close at 8,127 while the Sensex tanked 2.29 per cent (630 points) to close at 26,877, eroding ₹2.04 lakh-crore of investor wealth. While FIIs sold net equities worth ₹1,329 crore, domestic institutional investors bought net equities worth ₹1,332 crore. Retail investors on the BSE bought net equities worth ₹69 crore.
All the broader and sectoral indices closed in the red and the market was highly volatile, with the volatility index India Vix closing 10.31 per cent higher at 20.54. “Factors such as an increase in bond yields in Europe, outperformance by other emerging markets and currency depreciation are impacting global inflows,” said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
Rupee worries According to Hitesh Agrawal, Head, Research, at Reliance Securities: “Sustained depreciation of the rupee coupled with weak corporate earnings have created nervousness. Further, the not-so-encouraging management commentaries after the results have also dented sentiment.”
On Tuesday, the rupee dropped 32 paise against the dollar to close at 64.17.
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