Benchmark stock indices plunged 1.5% tracking global cues amid a fear that central banks, globally, would increase interest rates to tame high inflation.
The S&P BSE Sensex fell 872.28 points, or 1.46%, to 58,773.87 points. The NSE Nifty-50 index dropped 267.75 points, or 1.51%, to 17,490.70 points.
The Sensex stocks which lost the most value included Tata Steel (4.50%), Asian Paints (3.82%), Wipro (2.96%), Sun Pharma (2.90%), L&T (2.87). The top Nifty-50 losers includes Tata Steel (4.41%) Tata Motors (3.70%), Adani Ports (3.65%), Asian Paints (3.63%).
Vinod Nair, Head of Research, Geojit Financial Services, said, “Consolidation was triggered in the market in anticipation of tighter monetary policy by the Fed and worries over a slowdown in global economic activity.”
“The current risk reward is not favouring investors as the Nifty50 is now trading at a premium valuation of 21.5x P/E (1 year forward basis), above the long-term average. Rising dollar index and higher U.S. 10-year bond yield act as the near-term headwinds for the market,” he added.
The rupee also came under selling pressure on Monday closing unchanged from the previous session at 79.84.
“The Indian rupee has slumped towards a three-week low, amid a recovery in crude oil prices and the resurgent dollar index which has climbed by more than 3.5% since testing lows of the 104.63 mark, two weeks ago,”Sugandha Sachdeva, Vice President, Commodity and Currency Research, Religare Broking Ltd. said.
The steep correction witnessed in the domestic equities has further added to the rupee woes, she said..
“Going forward, the domestic currency is likely to trade in a range between 80.10 and 79.20, where the 80.10 mark is a crucial support for the pair,” she added.
