Sensex crashes 740 points

Sensex crashes 740 points, Nifty tanks below 8,300 

The benchmark BSE Sensex crashed 740 points and the NSE index Nifty nosedive below 8,300 level as emerging market shares and currencies slumped as investors feared higher US interest rates under incoming President Donald Trump will spark capital outflows.

Higher US interest rates could make emerging markets less attractive for global investors, sparking outflows and hitting currencies such as the rupee.

The partially convertible rupee was at 67.0400 per dollar versus its previous close of 66.6250. It fell as low as 67.2000, its lowest since August 29, earlier in the day.

At 3.20 p.m., the 30-share BSE index Sensex was down 687.76 points or 2.5 per cent at 26,829.92 and the 50-share NSE index Nifty was down 226.20 points or 2.65 per cent at 8,299.55.

All BSE sectoral indices were trading in the red. Among them, realty index plunged the most by 4.41 per cent, consumer durables 4.31 per cent, auto 4.16 per cent and FMCG 2.82 per cent.

Major Sensex losers were Adani Ports (-6.11%), M&M (-5.03%), Tata Motors (-5.00%), Asian Paints (-4.85%) and ICICI Bank (-4.73%), while the only gainer was Sun Pharma (+4.06%).

“The larger cause of worry is with the currency. In global markets, some of the currencies are getting hit very badly against the dollar, resulting in significant amount of economic damage to those countries,” said Deven Choksey, managing director at KR Choksey Securities.

The Nifty bank index dropped as much as 1.41 per cent, after a four-session winning streak on the back of hopes that India's unexpected push to withdraw larger banknotes from circulation would lead to a surge in lenders' cash positions.

ICICI Bank Ltd and Yes Bank Ltd were among the biggest percentage losers on the index.

The Nifty IT index fell 2.51 per cent, heading for its biggest weekly fall since mid-February, on worries about what Trump's election would meant for the export-dependent sector.