Share market resumes downward spiral after 2-day pause; RIL biggest drag

New Delhi: Equity indices resumed their slide on Wednesday after a two-day breather, pressured by profit-taking at higher levels and a sell-off in global markets. The rupee slumped to record lows amid unrelenting foreign fund outflows, which further weighed on sentiment, traders said.

The 30-share BSE Sensex tanked 709.54 points or 1.35 percent to close at 51,822.53. Similarly, the broader NSE Nifty fell 225.50 points or 1.44 percent to 15,413.30.

Tata Steel was the biggest laggard in the Sensex pack, shedding 5.24 percent, followed by Wipro, Reliance Industries, IndusInd Bank, HCL Technologies, Bajaj Finserv, Titan and Bajaj Finance.

Only four counters managed to close in the green, TCS, HUL, Power Grid and Maruti Suzuki, rising up to 0.31 percent.

"Pull-back rallies can be sharp and it was sharp yesterday. The important question is, will this continue? There is no economic news, except the softness in crude, to sustain the rally.

"There is no reason for FIIs to change their selling strategy since the dollar continues to be strong and US bond yields are attractive and expected to rise further," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

In the broader market, the BSE midcap gauge lost 1.53 percent and the smallcap index declined by 1.11 percent.

All the BSE sectoral indices ended lower, with metal tumbling 4.96 per cent, followed by basic materials (2.67 percent), realty (2.24 percent), consumer discretionary goods and services (1.11 percent), power (2.11 percent) and utilities (2.08 percent).

Religare Broking's Vice President (Research) Ajit Mishra said participants are awaiting US Federal Reserve chair's speech scheduled for later on Wednesday.

"Besides, progress on monsoon, crude price and currency movement will be key monitorables. We reiterate our cautious stance on the markets and expect volatility to remain high in the near term. Meanwhile, traders are advised to keep a hedge position while investors should focus on stock selection," he added.

World stocks dropped on renewed concerns over rising interest rates and risks of a recession.

Elsewhere in Asia, markets in Hong Kong, Seoul, Shanghai and Tokyo ended lower.

European bourses were also trading in the red in mid-session deals.

Wall Street had recorded smart gains on Tuesday.

Meanwhile, international oil benchmark Brent crude dropped 4.19 per cent to USD 109.8 per barrel.

The rupee declined by 19 paise to a record low of 78.32 (provisional) against the US dollar on Wednesday.

Continuing their selling spree, foreign institutional investors (FIIs) offloaded shares worth a net Rs 2,701.21 crore on Tuesday, as per exchange data.