Sensex, Nifty crash on global cues over US growth fears

Mumbai: Equity market benchmark indices Sensex and Nifty tumbled in early trade on Monday in line with extremely weak trends in global markets amid fears of a slowdown in the US economy and foreign fund outflows.

The 30-share BSE Sensex tanked 2310.04 points (or 2.85 %) to 78,582.34 at 11.18 am. The NSE Nifty tumbled 729.80 points (or 2.95 per cent) to 23,987.9.

In the money market, the rupee opened on a muted note and fell to an all-time low of 83.80 against the US dollar on Monday, as the risk-off situation in world markets kept the dollar well bid.

From the Sensex pack, Tata Motors, Tata Steel, JSW Steel, Adani Ports, Maruti and Reliance Industries were the biggest laggards.

In Asian markets, Seoul, Tokyo and Hong Kong were trading sharply lower while Shanghai quoted higher. The US markets ended significantly lower on Friday.

“The rally in the global stock markets has been driven mainly by consensus expectations of a soft landing for the US economy. This expectation is now under threat with the fall in US job creation in July and the sharp rise in the US unemployment rate to 4.3 per cent. Geopolitical tensions in the Middle East also are a contributing factor,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,310 crore on Friday, according to exchange data.

“Anxiety remains high, especially after Friday’s unexpectedly weak US July jobs report, suggesting that volatility will be the hallmark of the day,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Global oil benchmark Brent crude climbed 0.35 per cent to $77.08 a barrel.

Re at an all-time low
Forex traders said the sharp downfall in the domestic unit came on the heels of a significant downturn in the Indian equity markets and significant foreign fund outflows.

At the interbank foreign exchange market, the local unit opened at 83.78 and then fell to an all-time low of 83.80 against the American currency, registering a fall of 8 paise from its previous close.

On Friday, the rupee settled 1 paisa higher at 83.72 against the US dollar in a range-bound trade.
(With PTI inputs.)