Sensex drops 232 points on rupee slipping to 4-month low

BSE Sensex and NSE Nifty open lower on Friday

BSE Sensex and NSE Nifty open lower on Friday

The fall was the largest in almost 10 months.

On Friday, the equity benchmarks- Sensex and Nifty once again reeled under pressure in morning trade as North Korea threatened that it could test a nuclear weapon in the Pacific. "This was the largest fall for both the indices on an intra-day and overall closing basis since November 11, 2016", Deepak Jasani, Head - Retail Research, HDFC Securities told IANS.

The Sensex and Nifty were trading down by almost one per cent due to sustained foreign fund outflows and weak global cues. It ended 447 points down at 31,922.44 points.

"With global equity markets in risk-off mode over Korean tensions, the ongoing weakness has gained more momentum".

India is considering a plan to loosen the fiscal deficit target so that it could spend an additional 500 billion rupees ($7.71 billion) in the financial year ending March 2018, two government sources said on Thursday. The rupee today dropped by 34 paise to a six and a half month low level of 65.15 against the USA dollar. But later, the domestic currency managed to recover.

Finance Minister Arun Jaitley had said earlier that the government was looking for ways to lift economic growth, which slipped to a three-year low of 5.7 per cent in the quarter to end-June. The sentiment weakened further after heavy losses in Asia, set off by China sovereign rating downgrade on fears over its ballooning debt and a lower opening in Europe.

It was followed by SBI 3.73 percent, Tata Steel 3.64 percent, Reliance 3.07 percent, Hero Motoco 2.82 percent, Axis Bank 2.62 percent, Coal India 2.31 percent and L&T 2.27 percent.

The S&P BSE Mid-Cap index fell 362.85 points or 2.27 percent to settle at 15,609.89.

Sector-wise, all the 19 sub-indices of the BSE closed in the red, led by capital goods (down 603.52 points), metals (down 554.26 points) and banking (down 526.84 points) indices.

Meanwhile, foreign portfolio investors (FPIs) andforeign institutional investors (FIIs) sold shares worth Rs 4,833.77 crore during the week, as per Sebi's record including the provisional figure of September 22.

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