Sensex Tanks Over 200 Points In Early Trade; Rupee Falls 41 Paise To 69.20 Vs USD In Early Trade

Forex traders said though the US Federal Reserve cut the benchmark lending rate on Wednesday for the first time in more than a decade, market participants reacted to Fed Chair Jerome Powell statement which indicated dampened hopes of further rate cut.

The rupee tumbled 41 paise to 69.20 against the US dollar in early trade on Thursday amid unabated foreign fund outflows and rising crude oil prices.

Mumbai: Equity benchmark BSE Sensex on Thursday tanked over 200 points in early trade on concerns over weak core industrial growth data and sustained foreign fund outflows. The 30-share index was trading 205.69 points or 0.55 per cent lower at 37,275.43; and the broader Nifty fell 16.15 points or 0.44 per cent to 11,069.25. In the Sensex pack, Vedanta took the biggest hit, trading 2.92 per cent lower, followed by Tech Mahindra, Yes Bank, Tata Motors and Tata steel. However, Power Grid, IndusInd Bank, ICICI Bank, Asian Paint, Maruti and HCL Tech were trading in the green. In the previous session, Sensex gained 83.88 points or 0.22 per cent to end at 37,481.12. The broader NSE Nifty ended 32.60 points or 0.29 per cent up at 11,118.00. The markets continue to witness persistent outflow of foreign funds from equities. Foreign investors sold shares worth Rs 1,497.07 crore on a net basis on Wednesday, as per provisional data with stock exchanges. Growth of eight core industries dropped to 0.2 per cent in June, mainly due to contraction in oil-related sectors as well as cement production, according to official data. The government on Wednesday also revised downwards the growth rate of these eight sectors for May to 4.3 per cent from the earlier estimate of 5.1 per cent. Overall investor sentiment was weak after the government on Wednesday released the core industries output growth numbers, which dropped to 0.2 per cent in June, experts said. Meanwhile, the government's fiscal deficit touched Rs 4.32 lakh crore for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal. The US Federal Reserve reduced the benchmark lending rate by 25 basis points to 2.0-2.25 per cent on Wednesday for the first time in more than a decade. Elsewhere in Asia, Shanghai Composite Index and Hang Seng were trading lower, while Nikkei and Kospi were in the green in their respective early sessions. US stocks ended on a negative note on Wednesday. Meanwhile, the rupee declined by 32 paise to 69.12 against the US dollar in morning trade. The global oil benchmark Brent crude futures rose 0.70 per cent to 65.17 per barrel. Rupee Vs Dollar The rupee tumbled 41 paise to 69.20 against the US dollar in early trade on Thursday amid unabated foreign fund outflows and rising crude oil prices. Forex traders strengthening of the greenback vis-a-vis other currencies overseas and cautious opening in domestic equities weighed on the local unit. Forex traders said though the US Federal Reserve cut the benchmark lending rate on Wednesday for the first time in more than a decade, market participants reacted to Fed Chair Jerome Powell statement which indicated dampened hopes of further rate cut. The rupee opened weak at 69.17 at the interbank forex market and slipped further to 69.20, showing a decline of 41 paise against its previous close. The domestic unit had settled at 68.79 against the US dollar on Wednesday. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,497.07 crore on Wednesday, provisionaldata with the exchanges showed. The 30-share index was trading 205.69 points or 0.55 per cent lower at 37,275.43; and the broader Nifty fell 16.15 points or 0.44 per cent to 11,069.25. The dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.35 per cent to 98.85. Meanwhile, the government's fiscal deficit touched Rs 4.32 lakh crore for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal. Brent crude futures, the global oil benchmark, climbed 0.70 per cent to USD 65.17 per barrel. The 10-year government bond yield was at 6.40 per cent in morning trade.