Key benchmark indices dropped in early trade on weak Asian stocks. The rupee hitting a record low against the dollar also dampened sentiment. The S&P BSE Sensex was down 195.54 points or 1.09%, off about 80 points from the day's high and up close to 45 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Capital goods pivotals declined on worries the ongoing slowdown in the economy could restrict new orders.
Asian stocks dropped for a second day on Wednesday on concern the US will take military action against Syria.
The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Tuesday, 27 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1373.99 crore on Tuesday, 27 August 2013, as per provisional data from the stock exchanges.
The rupee hit a record low against the dollar below 67 mark today, 28 August 2013. The partially convertible rupee was trading at 67.20 per dollar, sharply lower than its close of 66.24 on Tuesday, 27 August 2013. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
The market is expected to remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month August 2013 series to September 2013 series. The near month August 2013 derivatives contract expire tomorrow, 29 August 2013.
At 9:30 IST, the S&P BSE Sensex was down 195.54 points or 1.09% to 17,772.54. The index tumbled 238.98 points at the day's low of 17,729.10 in early trade. The index declined 116.64 points at the day's high of 17,851.44 in opening trade.
The CNX Nifty was down 82.85 points or 1.57% to 5,204.60. The index hit a low of 5,202.80 in intraday trade. The index hit a high of 5,236.05 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 545 shares fell and 158 shares rose. A total of 24 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks fell and rest of them rose. ONGC (down 5.77%), HDFC (down 4.56%) and ICICI Bank (down 3.9%), edged lower.
Jindal Steel & Power rose 0.24%. A meeting of the board of directors of Jindal Steel & Power will be held on Friday, 30 August, 2013, to consider a proposal for buy-back of equity shares of the company. The company announced this after market hours on Tuesday, 27 August 2013.
Capital goods pivotal dropped on worries the ongoing slowdown in the economy could restrict new orders. Engineering and construction major L&T lost 2.34%.
Bhel dropped 4.6%, with the stock extending Tuesday's 9.49% losses.
Asian stocks dropped for a second day on Wednesday on concern the US will take military action against Syria. Key benchmark indices in Singapore, Hong Kong, Indonesia, China, South Korea and Japan fell by 0.24% to 2.32%. Taiwan's stock market rose 0.06%.
US stocks fell hard on Tuesday, with the Dow Jones Industrial Average ending at a two-month low, as unease over possible US action against Syria shook global markets.
US President Barack Obama is working with allies including the UK and France to reach agreement on limited action against Syria after concluding the regime used chemical weapons against civilians, fanning concern unrest may disrupt Middle East oil supplies.
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