Sensex tanks on rate hike woes
Market slips more than 577 points in the afternoon session in anticipation of a interest rate hike by the central bank. Sensex had a 5:26 advance to decline ratio at closing on Wednesday.
The falling rupee, rising crude oil price, escalating trade war tension and the scheduled monetary policy meet on Thursday induced selling pressure on the market. The Indian currency breached US$ 73 per dollar mark which is a new low. There is consensus in the market that the Reserve Bank of India (RBI) will increase the repo rate by 25 basis points on Thursday to address rising inflation triggered by higher crude prices and deprecating rupee. Higher interest rates have a negative bearing on the economy in general as they increase the cost of borrowing for the industry.
The benchmark index BSE Sensex closed at 35,975.63, down by 550.51 points or 1.51 per cent, while the Nifty50 closed at 10,851.20, down by 157.10 points or 1.43 per cent on Wednesday.
On Nifty50, M&M, Eicher Motor, Infratel, TCS, Axis Bank were pulling the market down with M&M down 7.03 per cent, followed by others down from 6.79 to 3.62 per cent, respectively. Among the gainers were Yes Bank, Hindalco, Indiabulls Housing, HPCL, Vedanta up 5.63 to 3.35 per cent.
Among sectoral indices, Auto sector was leading the fall, down by 3.20 per cent, followed by IT down by 2.04 per cent, while FMCG, and banks were down more than 1 per cent each. The only sector which was in the positive territory on Wednesday was Metals.
The most actively traded stock of the day was Yes Bank, which lead both in terms of value and volume.