Sensex plunges over 500 points; banks, metals fall

Mumbai  :  A benchmark index of Indian equities markets plunged over 500 points in late afternoon trade Thursday as the Indian rupee slumped to another record low coupled with negative global cues following the US Federal Reserve signalling an end to its bond-buying programme.

On Thursday, the partially convertible rupee opened sharply lower and hit the record low of 59.93 in the morning session at the inter-bank foreign exchange market in Mumbai, surpassing the previous record of 58.98 hit June 11.

The rupee had closed at 58.71 Wednesday. The drop in the Indian currency came after US Federal Reserve Chairman Ben Bernanke signalled that the US Fed would start winding down its stimulus spending later this year.

The withdrawal in the stimulus spending is anticipated to have a profound impact on global financial liquidity — this might lead foreign investors to pull out of the Indian markets, which are impacted by a sluggish economy, high interest rates and a sticky inflation level.

There was heavy selling in stocks such as banks, metal, oil and gas, capital goods and public sector undertakings (PSUs).

All sectoral indices of the S&P Bombay Stock Exchange (BSE) were in the red.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 19,069.20 points, was trading at 18,742.64 points, down 516.60 points or 2.61 percent from its previous day’s close at 19,245.70 points.

The Sensex touched a high of 19,069.20 points and a low of 18,687.19 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading at 2.73 percent or 159 points down at 5,663.25 points.

Photo  : AFP