Sensex Falls 100 Points, Rupee Slides Past 65 Against US Dollar

Indian stock markets fell today after expectations of faster interest rate hike by the US Federal Reserve soured global market sentiment. Meanwhile, the rupee slid beyond 65 against the dollar for the first time since mid-November. The rupee slipped to 65.06 in morning trade against the US dollar. The rupee had ended at 64.76 against the US dollar on Wednesday. Broad strength in US dollar and outflows from domestic capital markets have weighed on the rupee.

The Sensex fell over 100 points to 33,700 while Nifty slipped below 10,350, amid mixed Asian markets. Elsewhere in other global markets, most Asian share markets followed US markets lower on expectations of faster hikes in US interest rates. Japan's Nikkei shed 1.2 percent. Overnight, on Wall Street, the Dow had ended down 0.67 per cent, while the S&P 500 fell 0.55 per cent and the Nasdaq 0.22 per cent. The retreat came after minutes of the Federal Reserve's last policy meeting showed the usual concerns that inflation might disappoint, but also an expectation of faster economic growth due to fiscal stimulus.

(Read: Rupee Slides Past 65 Against US Dollar For First Time In 3 Months)

In particular, US Federal Reserve members agreed that "the strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate." That led investors to narrow the odds on faster hikes by the US Federal Reserve.

Back in the domestic markets, the selling pressure was broad-based, except in IT stocks. Among the frontline IT stocks, Tech Mahindra, HCL Tech, and TCS were up over 1 per cent each. Portfolio shuffling, together with expectations of stable earnings, is prompting investors to flock in the IT pack, said Saurabh Jain, assistant vice president of research at SMC Global Securities.

Comments

Revenue from software services exports will rise 7 percent-9 percent in constant currency terms in the fiscal year to March 2019, the National Association of Software and Services Companies forecast on Tuesday, as the industry continues to recover from what has been a tough year.

On the other hand, banking, metal and auto stocks led the markets lower. Among Nifty50 stocks, Ambuja Cements, ONGC, Bharti Infratel, Hindalco and BPCL were down between 1.5 per cent and 3.5 per cent.