Equities sank the most in six weeks as the Sensex crashed 267 points to close below 30,000 while the Nifty retreated from a life high amid a lower opening in Europe ahead of key US jobs data and slide in crude prices.
The 30-share Sensex hit a low of 29,823.60 before settling at 29,858.80, down 267.41 points, or 0.89%, its biggest single day fall since March 22 when it had lost 317.77 points. The index had risen by 231.41 points in the previous session, buoyed by reforms steps in the banking and infra space.
The 50-issue NSE, which surpassed its previous record of 9,367.15 (intra-day), reached on April 27, to scale a new high of 9,377.10 (intra-day), ended down 74.60 points, or 0.80% at 9,285.30, mainly due to profit booking.
On a weekly basis, both the indices—the Sensex and the Nifty—fell by 59.60 points, or 0.19%, and 18.75 points, or 0.20%, during the first week of May.
Meanwhile, President Pranab Mukherjee has promulgated an ordinance authorising the Reserve Bank to issue directives to banks to initiate insolvency resolution process in the case of loan default. This will provide a big boost to the government’s efforts to tackle mounting bad loans.
The ordinance has been issued in light of the urgency to deal with the toxic loans that have crossed the Rs 6 lakh crore mark. Sentiment soured largely in tune with a weak trend in global markets following a drop in crude prices and fresh fall in commodities, including base metals, raising concerns about the health of the economy, traders said.
Meanwhile the rupee closed near two-week lower against the US dollar, tracking losses in the local equity and Asian currencies markets before the release of US jobs data due later.
The rupee closed at 64.37 a dollar—a level last seen on April 24, down 0.31%, its steepest fall since April 10, from its Thursday’s close of 64.17. The rupee opened at 64.23 a dollar and touched a high and a low of 64.23 and 64.39 respectively.
Traders are also cautious as US Federal Reserve chair Janet Yellen and at least five other central bank officials are scheduled to speak on Friday and ahead of the French presidential election on Sunday.
So far this year, the rupee has gained 5.53%, while foreign investors bought $6.29bn and $7.61bn in local equity and debt markets, respectively.
The 10-year bond yield closed at 6.943% compared to its previous close of 6.968%. Bond yields and prices move in opposite directions.
Asian currencies were trading lower. South Korean won was down 0.64%, Singapore dollar 0.38%, Malaysian ringgit 0.26%, China Offshore 0.19%, Thai Baht 0.16%, Philippines peso 0.14%, Taiwan dollar 0.1%, China renminbi 0.08%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.904, up 0.11% from its previous close of 98.797.