Sensex Falls Over 600 Points as Foreign Investors Dump Shares

BSE Sensex and Nifty fell nearly 2.5 per cent on Friday amid continued selloff from foreign investors. Traders remained wary ahead of the crucial US jobs data which will be released later in the day. Weak global markets also impacted the sentiment. The Sensex fell as much 645 points to 25,119 while Nifty slumped to 7,627. This is the lowest value of Sensex in 14 months.

Here are top 10 developments:

1) Indian markets are witnessing an exodus from foreign investors who sold a record Rs 16,877 crore worth of domestic stocks in August. On top of that, they sold Indian stocks worth nearly Rs 2,650 crore in the first three days of this month.

2) This selloff from foreign investors comes despite the government earlier this week announcing relief to foreign investors on minimum alternative tax.

3) Besides worries over global economy, concerns over slowdown in Indian economy, pace of reforms and weak monsoon have weighed on the market sentiment.

4) Unless the selling pressure from foreign investors ease, Indian markets are not likely to regain a steadier footing, say analysts.

5) Concerns over global growth, particularly about China’s economy, and possibility of a rate hike in the US have roiled global markets including India. The Sensex has lost over 10 per cent since China devalued its currency on August 11 while the rupee weakened nearly 3.5 per cent. The rupee today fell to 66.48/dollar today against yesterday’s close of 66.24.

6) Analysts say that Indian markets are likely to remain volatile till the crucial US Fed meet which is scheduled for September 16-17. (Read:More Pain Ahead for Sensex, Rupee: Experts)

7) Indian stock markets and the rupee could face more pressure if the US payrolls data boost expectations that the Federal Reserve is on course to raise interest rates later this month. An interest rate hike in the US could accelerate the selling from foreign investors who would like to park their money in US bonds.

8) Banking, auto, real estate and metal stocks witnessed strong selling pressure today with their sectoral indices on the BSE slumping between 2-4 per cent. Just 2 stocks out of Nifty 50 traded in the green.

9) Asian markets fell sharply today with Japan’s Nikkei slumping over 2 per cent. China markets remain closed today for a holiday. Major European markets were down over 1.5 per cent.

10) The selloff in global markets comes despite the European Central Bank yesterday announcing that it is ready to expand its massive 1 trillion euro stimulus programme. The bank cut its growth forecasts for the euro zone and warned of further trouble from a slowdown in China’s economy.