Sensex sinks more than 700 points

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Mumbai: The markets went into a tailspin, as both the Sensex and Nifty touching their lowest levels in this calendar year. It is on persistent selling by foreign funds amid continued concerns over retrospective taxation. The tax on subsidies and the geo-political tensions in the Middle-East also the reason of dampened sentiment on Wednesday.

The BSE Sensex plunged more than 700 points to break below its crucial psychological level of 27,000 and the Nifty broke its crucial 200-DMA mark. Today sensex ended at 26,717, lower by 722 points or 2.6% and the Nifty settled with losses of 227 points or 2.7% at 8,097. In fact, the Nifty ended below 8,100 for the first time since Dec 17, 2014.

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Experts opinion that RBI would be quite cautious on cutting key rates again in the June policy considering the recent rise in global bond yields, crude oil prices and uncertainty on path of food prices given recent unseasonal weather patterns. For that reason incoming data till next one month would be important.

In overseas markets, the Asian stocks edged lower mirroring overnight sell-off in US stocks as investors were spooked by a vicious selloff in sovereign bonds globally. US stocks dropped on Tuesday after the latest data showed that the US trade deficit soared 43% in March. The key indices in China, Hong Kong, Singapore, Taiwan, and South Korea shed between half a percent and 1% each.

However, the European indices, including the CAC, DAX and FTSE bounced back between half a percent to one percent each after cracking around 2% in the previous trading session.

The rupee slipped from its initial gains and dropped to 63.65 against the dollar on sustained dollar demand from banks and importers amid weak equities. Earlier, the rupee had opened higher at 63.35 against yesterday’s closing of 63.44 at the Interbank Foreign Exchange market.

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