Chances of US Rate Hike Depresses Markets; Sensex Down 214 Points

Heightened chances of a US rate hike, coupled with negative sentiments emanating out of the Chennai floods, depressed Indian equity.

Published: 04th December 2015 03:17 PM  |   Last Updated: 04th December 2015 03:18 PM   |  A+A-


Bombay Stock Exchange (File|Reuters)


MUMBAI: Heightened chances of a US rate hike, coupled with negative sentiments emanating out of the Chennai floods, depressed Indian equity markets and led a barometer index to shed 214 points or 0.83 percent during the late-afternoon trade session on Thursday.

Initially, both the bellwether indices of the Indian equity markets opened on a negative note following weak Asian markets.

Furthermore, sentiments' were depressed following flooding in Chennai, that has impacted automobile and information technology (IT) industries' centres which are located there.

Besides Chennai floods, the upcoming key US-based macro economic data -- the non-farm payrolls figures are causing global volatility and impacting the Indian markets.

Even the slow movement on getting key economic legislations passed during the ongoing winter session has had investors' spooked.

The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) declined by 214 points or 0.83 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the red. It was lower by 63.25 points or 0.80 percent at 7,800.90 points.

The Sensex of the BSE, which opened at 25,810.06 points, was trading at 25,672.15 points (at 2.45 p.m.), down 214.47 points or 0.83 percent from the previous day's close at 25,886.62 points.

The Sensex has so far touched a high of 25,810.06 points and a low of 25,644.35 points during the intra-day trade.

On Thursday, the Sensex of the BSE closed 231.23 points, or 0.89 percent down following heightened chances of a US rate hike and the lower-than-expected stimulus package from the European Central Bank (ECB) through its bond buying program.

Analysts elaborated that the markets continued to trade in the red after Thursday's comments made by US Federal Reserve (US Fed) chairperson Janet Yellen which heightened the chances of a US rate hike in mid-December.

"Thursday's comments' by US Fed chairperson Yallen and the upcoming US jobs data has caused uncertainty and made investors' reluctant to chase prices," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

"The flooding in Chennai has also had a negative impact on sentiment due to the presence of large automobile and IT clusters' in the area."

Nitasha Shankar, vice president for research with YES Securities said: "Indian market continue to decline for third day in a row taking cues from weakness across the globe."

"Weakness is seen across all major sectors barring the metal and pharma stocks, which are bucking the trend. Banking and tech stocks continue to witness powerful selling pressure."

Sector-wise during the day's trade, healthcare and metal indices gained, while automobile, banking and consumer durables indices came under selling pressure.

The S&P BSE healthcare index gained by 82.08 points and metal index was higher by 15.36 points.

The S&P BSE automobile index receded by 194.26 points, banking index declined by 192.91 points and consumer durables index decreased by 111.74 points.

Even the Indian rupee came in for a beating after Yellen's comments which heightened the chances of a US rate hike in mid-December, it fell to its lowest levels in more than two years.

The Indian rupee fell in early trade to touch 67.01 to a US dollar against its previous close of 66.66 to a greenback. However, it later recovered and was trading at 66.81 to a US dollar (at 2.50 p.m.).


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