Indian shares slid on Wednesday, led by losses in technology and financial stocks, while worries that the U.S. central bank will keep raising interest rates dented investor sentiment.
The BSE Sensex ended 168 points lower to close at 59,028.91; while the Nifty fell 31 points to close at 17,624.40. About 2073 shares have advanced, 1289 shares declined, and 121 shares are unchanged.
Among the sectors, the auto index shed a percent while buying was seen in FMCG, IT and pharma space. The midcap and smallcap indices added half a percent each.
The Rupee ended at 79.90/US$, versus Tuesday’s close of 79.84/US$.
The Indian rupee slid towards a key level of 80 against the dollar on Wednesday, amid a selloff in Asian markets sparked by persistent weakness in the Chinese yuan.
The partially convertible rupee fell 0.1% to 79.9250 by 0445 GMT, as the dollar index climbed back to a 20-year high after strong U.S. services data made the case for the Federal Reserve continuing on its aggressive interest rate-hike path.
The yuan weakened towards 7 per dollar despite efforts by the People's Bank of China to revive the beleaguered currency, but data showing that the country's August exports missed estimates soured sentiment further.
Asian peers also fell as strong U.S. economic data added to expectations the U.S. central bank would not be slowing the pace of interest rate hikes any time soon. Wall Street also ended lower on Tuesday.
In Mumbai, the Nifty IT index and the Nifty Bank index fell as much as 0.9% each.
US August 2022 non-manufacturing ISM index recently came in at 56.9, higher than estimated 55.4 and also up from previous month’s 56.7.
Investors are now expecting Fed to continue to hike policy rate by 75bps in its September 2022 meeting. The fear is also that higher interest rate regime is likely to stifle growth in the coming quarters.
Elsewhere in Europe, high inflation is already impacting manufacturing and service sector growth. Demand from China is also likely to suffer as it maintains zero Covid policy and continues to keep its cities in lockdown.
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