Indian stocks fell sharply on Friday amid a selloff in global markets. The Sensex declined over 200 points while Nifty slipped below 7,800 levels. Also weighing on the Indian stock markets, the rupee fell to an over two-year low of 66.99 against dollar, as compared to Thursday’s close of 66.65. The rupee last traded below 67 per dollar in September 2013, when Reserve Bank of India Governor Raghuram Rajan took charge of the central bank amid a crisis-like situation.
Here is a 10-point cheat-sheet:
1) The renewed weakness in the rupee has come from external factors, in particular from the US, where the Federal Reserve is likely to raise rates for the first time in a decade.
2) On Wednesday, Fed Chair Janet Yellen said the US is ready for a rate hike. This has reinforced expectations that the US central bank will hike rates in its policy meeting on December 16. (Read more)
3) The sharp rise in the dollar index has also weighed on the rupee. The strengthening in the euro, which the rupee closely tracks, also led to pressure on the Indian currency. Brokerage Edelweiss said the rupee could trade in a range of 66.50 to 67.20 in the near term.
4) The selloff in the global stock markets today has been attributed to the European Central Bank’s stimulus package which fell well short of markets’ high expectations. (Read more)
5) Selling pressure in Indian markets was broad-based with all the sectoral indices on the BSE trading in the negative. Banking, IT and FMCG stocks in particular were under strong selling pressure. Tata Consultancy Services (TCS), ICICI Bank, ITC and Infosys were down between 1 per cent and 1.5 per cent.
6) IT stocks have been under pressure in the past few sessions. Most Indian IT companies have 10-30 per cent of their workforce based in Chennai, where floods hit normal business activities.
7) In India, foreign institutional investors sold equities and bonds worth over Rs 7,000 crore last month, pulling down stock markets and putting pressure on the rupee. Foreign investors have continued their selling spree this month, selling Indian stocks worth over Rs 600 crore.
8) Despite weak global cues, analysts say that Nifty has support at around 7,750 levels. And a breakthrough on the GST (Goods and Services Tax) Bill could be positive trigger for Indian markets.
9) Asian markets were weak today with Japan’s Nikkei falling over 2 per cent and China’s stocks down nearly 1.5 per cent.
10) Overnight, Wall Street’s benchmark S&P 500 stock index had its biggest one-day percentage decline since September 28, dropping 1.4 per cent. The pan-European stock index of FTSEurofirst 300 shed 3.3 per cent – its biggest fall since August 24.
Read full article: NDTV