Sensex, Nifty slump 1% amid unabated foreign fund outflows

PTI Mumbai: Equity benchmark indices Sensex and Nifty slumped 1 per cent each on Tuesday due to widespread selling pressure amid uninterrupted foreign fund outflows and sluggish global trends. The BSE benchmark Sensex tumbled 820.97 points or 1.03 per cent to settle at 78,675.18. During the day, it plunged 948.31 points or 1.19 per cent to 78,547.84. Falling for the third day running, the NSE Nifty tanked 257.85 points or 1.07 per cent to 23,883.45. From the 30-share Sensex pack, NTPC, Asian Paints, HDFC Bank, State Bank of India, Tata Motors, JSW Steel, Maruti, and Power Grid were among the major laggards. On the other hand, Sun Pharma, Infosys, and ICICI Bank were the gainers. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,306.88 crore on Monday, while Domestic Institutional Investors (DIIs) infused Rs 2,026.63 crore in shares, according to exchange data.

"Two strong factors have been at play in this consolidating market. One, the relentless selling by FIIs has been favouring the bears and pulling the market down. Two, the sustained buying by DIIs has been supporting the market preventing a crash in the market. How the market will trend in the coming days will depend on the relative strength of these two factors," VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said. In Asian markets, Seoul, Tokyo, Shanghai, and Hong Kong settled in the negative territory. European equity markets were also trading in the red.

Wall Street ended higher on Monday. Global oil benchmark Brent crude climbed 0.56% to $72.23 a barrel. After gyrating between highs and lows, the BSE benchmark eked out a marginal gain of 9.83 points or 0.01% to settle at 79,496.15 on Monday. The Nifty dipped marginally by 6.90 points or 0.03% to 24,141.30.

Rupee slips 1 paisa against US dollar: Meanwhile, the rupee fell 1 paisa to a new lifetime low of 84.39 (provisional) against the US dollar on Tuesday as persistent foreign fund outflows and a strengthening greenback against major crosses overseas dented investor sentiments. Forex traders said the rupee is likely to trade between 83.80 and 84.50 in the medium term, with the Reserve Bank of India likely limiting any significant downside, aided by its robust foreign exchange reserves. At the interbank foreign exchange, the rupee opened at 84.39 against the US dollar. During the session, the local currency touched a high of 84.39 and a low of 84.41. It finally settled at 84.40 (provisional), a decline of just 1 paisa against the US currency, registering a loss for the fifth straight session.

On Monday, the rupee dropped 1 paisa to hit a new lifetime low of 84.38 against the US dollar. In the last five sessions, the local unit has lost 32 paise against the greenback. "The rupee traded weaker as foreign funds continued their selling spree in the Indian market. However, the rupee received some relief from falling crude and gold prices, as the reduced pace of decline could potentially improve India's import bill in the coming months," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities. Despite this, the dollar index's continued strength above 105 is expected to maintain pressure on the rupee, limiting any significant recovery in the near term. "With resistance near the 84.25-84.30 zone and support is seen lower at 84.55. This week's focus will be on the US CPI data release, which could influence the dollar's trajectory.

Additionally, US Fed Chairperson Jerome Powell's upcoming speech is expected to provide insights that may drive price action in the dollar, currently trading at a four-month high of 105.75," Trivedi said.