New Delhi, October 22 (H.S.): The domestic equity market continued its downward trajectory on Thursday, with the benchmark Sensex and Nifty closing in the red for the third consecutive trading session. Widespread selling across sectors dragged the BSE Sensex down by 460.30 points to settle at 73,249.39. Similarly, the National Stock Exchange’s Nifty declined by 123.70 points to close at 22,687.65.
Market experts attributed the decline to a combination of global headwinds and domestic concerns. Rajiv Dutta, CEO of Capex Gold and Investments Private Limited, said the sharp rise in international crude oil prices had dealt the biggest blow to market sentiment. Following the latest attacks by Yemen’s Houthi rebels in Saudi Arabia, Brent crude prices surged by nearly three per cent to reach USD 112 per barrel.
The spike in international oil prices kept shares of domestic oil marketing companies, paint manufacturers and tyre producers under sustained pressure throughout the trading session, as higher crude prices raised concerns over input costs and profitability.
Investors were also unsettled by the minutes of the Reserve Bank of India’s previous Monetary Policy Committee meeting, which have now been released. The minutes indicated that interest rates could be raised further in the coming period to contain inflation. However, policymakers also emphasised the need to avoid excessively aggressive measures, keeping the pace of economic growth in consideration.
According to Dutta, weak cues from global markets further undermined investor confidence in India. Asian equity markets witnessed substantial losses, with stock markets in South Korea, Hong Kong and Japan declining by as much as three per cent. US equity futures also traded lower.
Meanwhile, a sustained rise in US bond yields has encouraged foreign institutional investors (FIIs) to build short positions in the Indian market, adding to the prevailing selling pressure.
On the domestic front, the weakness of the rupee also weighed on equities. Amid the downturn in the stock market and rising crude oil prices, the Indian currency depreciated by 12 paise against the US dollar to close at 94.50 per dollar.
Amid the heightened market volatility, the India VIX, an index that measures expected market volatility and investor anxiety, surged by nearly six per cent to 16.55. The sharp rise in the volatility gauge further reflected the deterioration in market sentiment.
Market experts believe that the Nifty needs to decisively cross the 22,800 mark for a meaningful recovery to take shape. However, if the index fails to regain that level and slips below 22,500, the prevailing weakness could intensify further.
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Hindusthan Samachar / Jun Sarkar
