New Delhi, May 19 – Indian equity benchmark indices declined sharply lower and settled in the red on Thursday in line with weakness in the US markets.
“The meltdown in the US markets, on the fear of aggressive rate hikes, rattled investors and triggered a weak start. The situation worsened further due to heavy selling in the index majors across sectors wherein IT and metal majors were among the top losers,” said Ajit Mishra, VP, Research, Religare Broking.
This fall indicates that bears are in control as the Nifty has completely reversed the recent gains and again reached closer to the March low.
Indications from the global indices, especially US markets, are pointing toward a further decline and so, traders should align their positions accordingly, Mishra said.
On Thursday, Sensex closed at 52,792.23 points, down 1,416.30 points or 2.61 per cent, whereas Nifty was at 15,809.40 points, down 430.90 points or 2.65 per cent.
Further, Indian currency rupee depreciated 10 paise to close day’s trade at 77.72 per US dollar.
The Indian rupee has continued its losing streak after a brief respite as fragile risk sentiments in the markets continue to push the domestic currency on a lower incline.
“Even as the greenback has softened from its two-decade highs, and crude prices have also cooled off, the unabated outflows from the domestic equities amid mounting concerns of a global economic slowdown and spiraling inflation are weighing on the local unit,” said Sugandha Sachdeva, Vice President, Commodity and Currency Research, Religare Broking.
The overall bias is negative for the rupee-dollar exchange rate, and it seems primed to test the 78.50 mark in the near term, Sachdeva said, adding that, however, likely RBI interventions at regular intervals could soothe the market nerves intermittently.
Jateen Trivedi, Research Analyst at LKP Securities, said that the rupee can be seen inching closer to 78 in the coming sessions.