MUMBAI: The Indian benchmark indices fell for the fifth consecutive day, with Sensex posting its longest streak in three months, led by losses in FMCG and banking shares.
Market sentiment was also affected due to rattled FPIs following a SEBI diktat on KYC norms that will come into effect from December. Consequently, markets settled lower, while the domestic currency continued its downward slide, touching yet another record low of 71.50 for the third straight session.
The 10-year benchmark bond yield rose to a four-year high of 8 per cent compared to Monday’s close of 7.999 per cent, stoking fears of an out-of-turn monetary policy action.
“Further consistent rise in crude prices and dollar index is keeping sentiments bearish. The talks of rupee moving towards 72-73 levels is leading to speculative dollar buying in the market, which is driving the currency lower every day. RBI intervention is less despite the fact that forex reserves are around $400 billion,” said Rushabh Maru, Research Analyst, Anand Rathi Shares & Stock Brokers.
On Tuesday, S&P BSE Sensex fell 155 points to 38,158, while Nifty suffered 62 point loss to settle at 11,520 – its longest losing streak in three months. Seventeen out of the 19 sector gauges compiled by BSE ended lower led by the S&P BSE Basic Material index’s 2.5 per cent drop.
Among FMCG stocks, ITC and HUL fell 1 and 2.8 per cent respectively, while among banking shares, SBI fell 3.2 per cent, IndusInd Bank 2.3 per cent and ICICI Bank 1.7 per cent.
Traders anticipate that FMCG and metal sector will continue to put pressure on the Nifty and bring some more downside from current levels.
“Weaker currency and rising crude oil prices are a lethal combination for India. The worsening macroeconomic situation puts pressure on the markets,” said V K Sharma, Head Private Client Group & Capital Market Strategy, HDFC Securities.
Meanwhile, rupee slipped to a new record low of 71.50 per dollar in intraday trade. In all, it fell 3.3 per cent in August alone and over 10 per cent so far in 2018, to emerge as the worst-performing Asian currency.
Asian shares too fell and the dollar turned higher Tuesday as the trade dispute between the US and China threatened to escalate.