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Sensex, Nifty log biggest drop in 3 mths on US rate hike fears

Bombay Stock Exchange, Sensex

Mumbai: Indian markets today logged their biggest drop in 3 months with benchmark Sensex tanking 604 points to end below 29,000 mark and the Nifty index slipped 181 points to fall below 8,800 level on fears that an earlier-than-expected rate hike by US will hit fund inflows.

It was a sea of red in domestic markets today. Nearly 1900 shares on the BSE fell while less than 1,000 managed to rise.

Banking, power, capital goods, realty, metal, IT, oil&gas, auto and FMCG shares reported sharp losses. Only pharma stocks managed to buck the extremely negative trend on bourses.

Furthermore, weakness in the rupee, which depreciated to 62.58 intra-day at forex markets weighed on the sentiments.

Asian investors today followed US peers, who ran for the exit on Friday after Labour Department said unemployment fell to 5.5 per cent in February, the lowest level since May 2008.

The jobs data, which follows a slew of other positive indicators, triggered speculation the US Federal Reserve will lift rates from near-zero as early as summer, say brokers.

The BSE 30-share Sensex resumed with a gapdown and moved southwards to break 29,000-mark to a low of 28,799.76 before concluding at 28,844.78 — a net loss of 604.17 points, or 2.05 per cent. This is its worst daily drop since January 6.

As many as 26 out of 30 Sensex-based scrips closed in the red with the biggest loser being Sesa Sterlite that over 5 per cent, followed by Hindalco 4.70 per cent. TCS fell about two per cent after the company said it sees revenues in March quarter to be in line with trends in same period last year.

“…markets fear rate hikes by Fed backed by reviving growth and better than expected jobs numbers,” said Bonanza Portfolio, Senior Vice President, Rakesh Goyal.

The 50-issue NSE Nifty dipped below the 8,800-level by tumbling 181 points, or 2.03 per cent, to 8,756.75. Intra-day, it shuttled between 8740.55 and 8891.30. Today’s loss was also Nifty’s biggest drop since January 6 when it fell 251 points.

Sectorwise, the BSE Bank index suffered the most by falling 3.01 per cent, followed by Power (2.93 per cent), Capital Goods (2.74 per cent, Realty (2.58 per cent) and Metal (2.40 per cent) among others. However, the Healthcare index ended 0.30 per cent higher.

In tandem with overall trends, the BSE Mid-cap index fell by 1.30 per cent and Small-cap index lost 0.92 per cent.

Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 79.84 crore last Thursday. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 193.54 crore, as per provisional data.

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