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Benchmark share indices were down over 1% each in late trades on Thursday, amid weak global cues, after the US Fed further trimmed its monetary stimulus measures and concerns over emerging market currencies weighed on investor sentiment. Further, the expiry of January derivative contracts today also
At 2:30PM, the 30-share Sensex was down 1.3% or 261 points at 20,387 and the 50-share Nifty was down 79 points at 6,141.
The rupee continued to remain weak following the US Fed's decision to further tapering of $ 10 billion. The first round of tapering of an equal quantum was announced last month. The Indian currency was trading at 62.81 compared with previous close of 62.42 per dollar.
However, market had factored in the further tapering of $10 billion due to which the weaknesses is termed as "immediate and short-term". The central bank has assured that India is better prepared to face tapering due to its strong foreign exchange reserves position as current account deficit is falling.
Meanwhile, the Finance Ministry today in a statement assured investors and market participants that the fundamentals of the economy are strong and they should not have any worries over external factors viz. fed taper. The ministry said that it will take necessary steps along with the central bank to ensure stablity in the financial markets.
All sectoral indices except Consumer Durables were trading lower. Realty Index was the top loser among the sectoral indices on the BSE down 3.2% followed by Metal and Bankex indices among others.
The NSE Bank Nifty was down 2.8% at 10,148 after dropping to its lowest level since October last year. Bank shares were hit the hardest on concerns that the recent repo rate hike by RBI would hurt credit growth because of high interest rates. HDFC Bank, ICICI Bank, HDFC, SBI and Axis Bank down 2-3% each.
Profit taking was seen in index heavyweights ITC, Reliance Industries and Infosys with both stocks down over 1% each.
Metal shares also took a hit on the back of weak economic data from China. Manufacturing output in China during January contracted to 49.5 from December's 50.5 and new order growth weakened, a private survey showed, indicating sluggish start for the economy in 2014.
Among other shares, Bank of India has slipped 10% to Rs 187 after reporting 27% year on year (yoy) declined in net profit at Rs 586 crore for the third quarter ended December 31, 2013 (Q3), due to higher provisioning for bad loans. The state-owned lender had profit of Rs 803 crore in the same quarter year ago.
The broader markets were also trading weak with BSE Mid-cap and Small-cap indices down over 1.3% each.
Market breadth was weak with 1,737 losers and 693 gainers on the BSE.
