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Markets world over plunged after minutes of US Federal Reserve's last meeting were made public late Wednesday. Investor sentiment was hit adversely as latest minutes signal US stimulus may end sooner than expected.
The US central bank currently buys bonds worth $85-billion-a-month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. This easy liquidity has fuelled the rally in emerging markets such as India and is the major reason for volatility in those markets.
Last week, the sentiment was boosted after US Federal Reserve's incoming boss Janet Yellen, said the US economy and labour markets were functioning “far short of their potential and had to improve before the stimulus programme could be rolled back". According to some this aberration from earlier statment signals a duality in Fed's stance on tapering.
Experts are of the view that market participants are reading far too much into the Fed minutes as they offer nothing new and merely talk of an impending taper, which is bound to happen sooner or later.
Key benchmark share indices continued heading southwards since the start weighed down by financials, capital goods and IT stocks.
The 30-share BSE Sensex closed at 20,229 down over 406 points while the 50-share Nifty index gave up 123 points to close at 5,999 levels. This is the highest single day fall since September 3, 2013. The Sensex had plunged 651 points and the Nifty slumped 209 points on Sep 3.
Broader markets cracked too with small-cap and mid-cap indices falling between 0.9-1.2% on the BSE.
The rupee fell to 62.88 versus its previous close of 62.57/58, after earlier hitting a session high of 62.97.
Downbeat China manufacturing activity greatly added to gloom in most Asian stock markets on Thursday, while emerging market currencies faltered as the dollar charged ahead after the US Federal Reserve's latest minutes hinted at stimulus tapering.
European markets too are lower today with stocks in France off the most. The CAC 40 is down 0.83% while Germany's DAX is off 0.42% and London's FTSE 100 is lower by 0.06%.
Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 1.92%, while the Hang Seng led the Shanghai Composite lower. They fell 0.51% and 0.04% respectively.
Japan's Nikkei stock average bucked the region as yen weakened against the dollar and on plans by a major government fund to invest more of its $2 trillion funds in riskier assets.
Back home, all sectors closed in red with BSE bankex leading the fall in sectoral indices; followed by capital goods, realty, Power and PSUs indices.
Top Sensex losers were ITC, HDFC, Reliance, Infosys, ICICI Bank and L&T
The market breadth remained weak with 1551 shares declining against an advance in 922 stocks.
Other Shares
Shares of cigarette maker ITC closed 2.6% lower at Rs 312.65, after hitting its lowest level since September 6, on the Bombay Stock Exchange (BSE), during the day. The stock single-handedly pulled Sensex down by 55 points today.
Shares of Jet Airways closed 0.1% lower at Rs 325.40 on BSE after the airline finally concluded the sale of 24 per cent equity stake in itself to Etihad Airways for Rs 2,057 crore. The share allotment took place seven months after Jet Chairman Naresh Goyal and Etihad Chief Executive James Hogan signed a deal in this regard in Abu Dhabi.
Future Retail dipped nearly 7.44% on NSE to Rs 73.45 after the National Stock Exchange (NSE) decided to remove the stock from future and options (F&O) contract from January 31, 2014 onwards.
Amara Raja Batteries closed 1.7% higher at Rs 336.45, extending its previous day’s nearly 4% rally, in otherwise weak market, after brokerages raise target price.
The US central bank currently buys bonds worth $85-billion-a-month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. This easy liquidity has fuelled the rally in emerging markets such as India and is the major reason for volatility in those markets.
Last week, the sentiment was boosted after US Federal Reserve's incoming boss Janet Yellen, said the US economy and labour markets were functioning “far short of their potential and had to improve before the stimulus programme could be rolled back". According to some this aberration from earlier statment signals a duality in Fed's stance on tapering.
Experts are of the view that market participants are reading far too much into the Fed minutes as they offer nothing new and merely talk of an impending taper, which is bound to happen sooner or later.
Key benchmark share indices continued heading southwards since the start weighed down by financials, capital goods and IT stocks.
The 30-share BSE Sensex closed at 20,229 down over 406 points while the 50-share Nifty index gave up 123 points to close at 5,999 levels. This is the highest single day fall since September 3, 2013. The Sensex had plunged 651 points and the Nifty slumped 209 points on Sep 3.
Broader markets cracked too with small-cap and mid-cap indices falling between 0.9-1.2% on the BSE.
The rupee fell to 62.88 versus its previous close of 62.57/58, after earlier hitting a session high of 62.97.
Downbeat China manufacturing activity greatly added to gloom in most Asian stock markets on Thursday, while emerging market currencies faltered as the dollar charged ahead after the US Federal Reserve's latest minutes hinted at stimulus tapering.
European markets too are lower today with stocks in France off the most. The CAC 40 is down 0.83% while Germany's DAX is off 0.42% and London's FTSE 100 is lower by 0.06%.
Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 1.92%, while the Hang Seng led the Shanghai Composite lower. They fell 0.51% and 0.04% respectively.
Japan's Nikkei stock average bucked the region as yen weakened against the dollar and on plans by a major government fund to invest more of its $2 trillion funds in riskier assets.
Back home, all sectors closed in red with BSE bankex leading the fall in sectoral indices; followed by capital goods, realty, Power and PSUs indices.
Top Sensex losers were ITC, HDFC, Reliance, Infosys, ICICI Bank and L&T
The market breadth remained weak with 1551 shares declining against an advance in 922 stocks.
Other Shares
Shares of cigarette maker ITC closed 2.6% lower at Rs 312.65, after hitting its lowest level since September 6, on the Bombay Stock Exchange (BSE), during the day. The stock single-handedly pulled Sensex down by 55 points today.
Shares of Jet Airways closed 0.1% lower at Rs 325.40 on BSE after the airline finally concluded the sale of 24 per cent equity stake in itself to Etihad Airways for Rs 2,057 crore. The share allotment took place seven months after Jet Chairman Naresh Goyal and Etihad Chief Executive James Hogan signed a deal in this regard in Abu Dhabi.
Future Retail dipped nearly 7.44% on NSE to Rs 73.45 after the National Stock Exchange (NSE) decided to remove the stock from future and options (F&O) contract from January 31, 2014 onwards.
Amara Raja Batteries closed 1.7% higher at Rs 336.45, extending its previous day’s nearly 4% rally, in otherwise weak market, after brokerages raise target price.
