Markets Turn Bearish, Falling Rupee Saps Investor Confidence

Domestic markets end deep in the red as profit-booking emerged in Reliance Industries, banking, and infra stocks amid a weak trend in global equities. Sensex closed 333.93 points or 0.64 per cent lower at 51,941.64, extending its losing streak to the second session.  

The broader NSE Nifty slumped 104.75 points or 0.67 per cent to end at 15,635.35. 

Concerns over frothy valuations and a depreciating rupee also sapped investor confidence, traders said. 

L&T shredded 1.80 per cent and was the top loser among the Sensex companies. Reliance Industries, Bajaj Finserv, IndusInd Bank, Bajaj Finance, SBI, Maruti, Axis Bank, and Bajaj Auto were among the others. 

PowerGrid, NTPC, Titan, HCL Tech, and Asian Paints were among the gainers, spurting up to 3.42 per cent.

"Domestic equities fell sharply as selling pressure in financials, auto and RIL dragged indices down," said Binod Modi, Head - Strategy at Reliance Securities.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,422.71 crore, as per exchange data. 

The rupee declined by 8 paise to end at 72.97 against the US currency. 

Asian markets traded weak, reacting to a higher-than-expected jump in China's producer price index at 9 per cent for May, he added. 

Global investors remained cautious ahead of European Central Bank (ECB) policy decision and US inflation data to be released on Thursday. ECB is expected to continue its bond-buying policy to support a recovering economy.  

"The US inflation is forecasted to be high but transitory. Both these factors, if inline, will provide comfort to the market," said Vinod Nair, Head of Research at Geojit Financial Services. 

Sector-wise, BSE energy, oil and gas, realty, capital goods, industrials, and auto indices fell up to 1.71 per cent, while utilities, power, and consumer durables closed higher. Broader BSE midcap and smallcap indices fell up to 0.95 per cent.

Bourses in Seoul, Tokyo, and Hong Kong ended in the red, while Shanghai ended with gains. Equities in Europe were also trading on a negative note in mid-session deals.

International oil benchmark Brent crude was trading 0.36 per cent higher at $72.48 per barrel.