Foreign funds anxiety over the minimum alternate tax (MAT), free falling rupee value and disappointing fourth quarter results led a benchmark index of Indian equities market to plunge by 586 points or over 2 percent during the late-afternoon trade session on Tuesday.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading deep in the red. It was down 187.10 points or 2.25 percent in the late-afternoon session at 8,138.15 points.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 27,502.91 points, slumped and was trading at 26,921.07 points (at 2.45 p.m.) in the late-afternoon session, down 586.23 points or 2.13 percent from the previous day's close at 27,507.30 points.
The Sensex touched a high of 27,502.91 points and a low of 26,887 points in the intra-day trade.
"The markets have fallen due to a combination of factors such as uncertainty over the US interest rate hike, higher commodity prices like crude oil, and increase in US 10-year bond yields," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
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The Indian rupee further weakened by around 19 paise against the US dollar to Rs.64.19 per dollar around 3.00 p.m.
"Domestic factors such the outcome of the parliament session and the dissapointing quarterly results have also dampened sentiments," Nevgi said.
Another major trigger for the fall was the investor anxiety over the US Federal Reserve's reaction to the better-than-expected growth in the non-farm jobs in the US.
Growth in jobs has the ability to push the Federal Reserve to increase interest rates, thereby attracting funds back into the US equities' market.
Other major jittery factor for investor is the release of crucial industrial production and inflation data. The data's will give cues on the Reserve Bank's ability to cut lending rates in its next monetary policy review scheduled on June 2.
In Tuesday's trade so far all 12 sector-based indices were trading in the red. The S&P BSE banking, capital goods, automobile, metal, oil and gas, information technology (IT), consumer durables, technology, entertainment and media (TECK) and healthcare indices came under heavy selling pressure.
The S&P BSE Bank index plunged by 650.73 points, followed by capital goods index which drowned by 524.43 points, automobile index receded by 377.27 points, metal index plummet by 295.81 points and oil and gas index decreased by 257.09 points.
The S&P BSE IT index declined by 201.75 points, consumer durables index edged lower by 128.47 points, TECK index fell by 113.01 points and healthcare index was down by 109.48 points.
