Equity markets post biggest fall in 6 months; Rupee closes at 72.45

Bond yield at 4-year high as CAD widens to the most in five years

The equity markets posted their biggest fall in six months, while the rupee and government bonds plunged further after India’s current account deficit (CAD) widened the most since 2013. 

The current account gap widened to $15.8 billion in June — 2.4 per cent of gross domestic product (GDP) — because of increase in oil payments. Investors were spooked by fears that the CAD might widen further, amid worsening domestic fundamentals. This caused a sharp correction across equities, bonds, and currency markets. 

The benchmark Sensex fell 468 points, or 1.22 per cent, to 37,922, while the Nifty50 index ended at 11,438.1,