Sensex edges down, ITC top loser; outlook remains bleak

The rupee gained slightly to 72.34 per dollar after declining to a fresh low of 72.6750 in the previous session, but the outlook remains bleak.

Published: 11th September 2018 12:53 PM  |   Last Updated: 11th September 2018 01:56 PM   |  A+A-

sensex, stock exchange, bombay, BSE, Nifty,

File Image of BSE Sensex. (File | Reuters )

By Reuters

Indian shares inched lower on Tuesday, extending their sharp falls from the previous session, as the rupee hovered near its record low, while fears of an escalation in the U.S.-China tariff dispute continued to haunt investors in broader Asian markets.

The rupee gained slightly to 72.34 per dollar after declining to a fresh low of 72.6750 in the previous session, but the outlook remains bleak.

DBS Bank said it expected sustained pressure on the rupee with factors such as higher oil prices, widening current account deficit and the U.S. Federal Reserve's rate hike cycle likely pushing it towards 75 per dollar levels.

Meanwhile, Asian shares were struggling to avoid a ninth straight session of losses, with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.15 percent.

The broader NSE Nifty was down 0.22 percent at 11,413.40 as of 0636 GMT, while the benchmark BSE Sensex was 0.24 percent lower at 37,831.29.

"The market will continue to remain under pressure for some time, likely until the end of the week, as it is already over-stretched," said R.K. Gupta, managing director at Taurus Asset Management.

"There is fear that rising crude prices, weakening of the rupee will cause inflation to go up and in that case, RBI (Reserve Bank of India) is bound to raise interest rates by 25 bps (basis points) in the October meeting. Some investors may choose to book profit before the second-quarter advance tax payment deadline, and markets may also see correction due to impending state elections in four states in November, Gupta said.

Consumer stocks lost the most with the Nifty FMCG index declining as much 2.1 percent to its lowest in nearly seven weeks.

ITC Ltd, the country's biggest cigarette maker, was the top loser, shedding 3.2 percent in its biggest intraday fall since May 4. Hindustan Unilever Ltd dropped 1.3 percent.

Meanwhile, Infosys Ltd rose 1.4 percent after brokerage UBS raised its target price on the stock, saying it expected revenue acceleration in FY19.

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