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Sensex dropped by 93 points to close at two weeks low

Realty, capital goods, power, banking and metal counters were the worst hit.

Updated: March 20, 2014 5:27 PM IST

By Press Trust of India

Sensex dropped by 93 points to close at two weeks low

sensex

Mumbai, Mar 20 (PTI) The Sensex and the Nifty Thursday closed at their weakest level in two weeks in line with a slump in global equity markets after US Federal Reserve signalled it would raise interest rates by the middle of 2015. The benchmark S&P BSE Sensex snapped its three-day gaining string and dropped 93 points to close at 21,740.09 — the lowest close since 21,513.87 on March 6. HDFC and L&T led the 22 losers in the 30-share index.

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The wide-based 50-issue CNX Nifty of the NSE also dipped 40.95 points, or 0.63 per cent, to end below the 6,500-mark at 6,483.10. This is also its weakest since 6,401.15 on March 6. Total market breadth was negative as 1,534 stocks ended lower, 1,269 finished higher and 137 closed flat.

American stocks fell Wednesday night after Federal Reserve chair Janet Yellen said the time-frame for raising interest rates could be on the order of around 6 months after the stimulus ends. The Fed also voted to cut its monthly bond purchases by USD 10 billion to USD 55 billion.

Brokers said the signal in hike in interest rates by Fed might affect foreign fund inflows, which drove domestic indices to lifetime highs recently. Jignesh Chaudhary, Head of Research, Veracity Broking Services said: “Wednesday the Federal Reserve gave indication that it may raise US interest rates from the middle of next year. If rates rise, then we could see capital outflows from emerging markets.”

The new time-frame is around 6 months earlier than what the markets had expected, according to HDFC Securities. A perceived slowdown in the Chinese economy also aggravated the situation further as all Asian markets closed in the red. Selling was seen in most of the segments as 9 out of 11 sectoral S&P BSE indices closed with losses while only IT, Teck and Healthcare finished with gains.

TCS, Infosys and Wipro led IT gains after recent losses. Realty, capital goods, power, banking and metal counters were the worst hit. Cautiousness ahead of the RBI’s policy meeting next month affected interest-rate sensitive scripts.

In Asia, all major equity indices closed sharply down. Prominent European indices were trading about one per cent lower each in early trades.

 

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