Sensex Ends 440 Points Lower, Tanks Over 1,200 Points In 4 Sessions

Benchmark indices extended fall in the last hour of trade amid tension along the India-Myanmar border. The Indian army targeted hideouts of terror group NSCN-Khaplang in Nagaland along the border. The Sensex closed 1.39 per cent or 439.95 points lower at 31,159.81 and the Nifty settled 135.75 points down at 9,735.75. Including today's fall, the Sensex has tanked 1,210 points in four trading sessions. Concerns over earnings growth and geopolitical tensions have led to selloff by foreign institutional investors. They have sold stocks worth nearly Rs 7,000 crore in this month so far.

Weakness in rupee also impacted sentiments. The rupee fell to a six-and-a-half-month-low of 65.75 against the dollar. The US dollar rose against a basket of currencies, which was underpinned by remarks from Federal Reserve Chair Janet Yellen on the need to continue with rate hikes. Higher interest rates tend to boost the greenback and push bond yields up, putting pressure on other currencies as well as dollar-denominated commodities such as gold.

Selling was visible across the sectors with state-owned banks and pharma stocks falling the most. The National Stock Exchange's sub-index for PSU bank stocks fell 3.06 per cent while the Nifty Pharma sub-index closed 2.81 per cent lower. State bank of India (SBI) fell 3.04 per cent while Bank of Baroda slipped 2.91 per cent. Adani Ports, UltraTech Cement, Dr Reddy's Laboratories and Aurobindo Pharma were among the other prominent losers in Nifty falling between 2.5 per cent and 4.7 per cent.

Analysts expect weakness in the market to continue in the near term. "Till Nifty remains below 9,820 zones, weakness could continue towards 9,685 and 9,550 zones while on the upside hurdles are seen at 9,777 then 9,820 zones," said Chandan Taparia, derivatives & technical analyst at Motilal Oswal Securities.

Among the 51 stocks in Nifty, seven stocks closed with gains while 44 ended with losses.

Selling was also visible in broader markets with the BSE Midcap index falling 1.98 per cent and the BSE Smallcap index closing 2.10 per cent lower.

Shares in ICICI Lombard General Insurance Company, which made a weak market debut today, closed 3 per cent higher at Rs 681.20 against its issue price of Rs 661.