Indian markets join global selloff as US Fed indicates fewer rate cuts ahead; Sensex sinks below 80k

Equity benchmark Sensex on Thursday plunged about 965 points to crash below the 80,000 level due to heavy selling in global equities after the US Federal Reserve signalled fewer rate cuts next year.

Besides, deep losses in consumer durables, banking and IT stocks amid foreign fund outflows added to the gloom, analysts said.

Falling for the fourth day running, the 30-share BSE benchmark Sensex tanked 964.15 points or 1.20% to settle at 79,218.05. During the day, the blue-chip index cracked 1,162.12 points or 1.44% to 79,020.08.

As many as 2,315 stocks declined while 1,680 advanced and 100 remained unchanged on the BSE.

The NSE Nifty tumbled 247.15 points or 1.02% to sink below the 24,000 mark at 23,951.70.

In the past four days, the BSE benchmark tanked 2,915.07 points or 3.54% and the Nifty declined 816.6 points or 3.29%.

"The Indian market saw a widespread decline following a global sell-off driven by the US Fed’s hawkish stance on interest rates. Sectors sensitive to interest rates, such as banking and real estate, significantly bore the brunt.

"However, the BoJ's decision to keep its interest rate steady, which surprised economists, aided in reducing the selling pressure. Despite this, investor caution persisted amid ongoing FII selling, with a strategic shift towards defensive sectors like pharma as evidenced by their outperformance," Vinod Nair, Head of Research, Geojit Financial Services, said.

From the 30 blue-chip pack, Infosys, Bajaj Finserv, JSW Steel, Bajaj Finance, Asian Paints, ICICI Bank, Reliance Industries, Tata Consultancy Services, Infosys, Tata Motors and Mahindra & Mahindra were the biggest laggards.

On the other hand, Sun Pharma, Power Grid and Hindustan Unilever were the gainers.

"Markets were plundered tracking negative global cues as benchmark indices slipped below their psychological levels on broad-based selling after the US Fed's hawkish stance raised concerns over further rate cuts next year. Rising US bond yields have pushed global currencies, including the rupee to new lows, while renewed foreign fund outflows from domestic equities could prompt investors to turn risk averse," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

The rupee dropped 14 paise and breached the crucial 85 level to close at an all-time low of 85.08 (provisional) against the US dollar on Thursday.

The BSE midcap gauge declined 0.30% and smallcap index dipped 0.28%.

Among sectoral indices, BSE Focused IT tanked 1.20%, consumer durables (1.15%), IT (1.13%), capital goods (1.07%), teck (1.05%) and financial services (1.05%).

BSE Healthcare emerged as the only gainer.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled lower.

European markets were trading in the negative territory. Wall Street ended sharply lower on Wednesday.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,316.81 crore on Wednesday, according to exchange data.

Global oil benchmark Brent crude dipped 0.08% to $73.33 a barrel.

The BSE benchmark Sensex tumbled 502.25 points or 0.62% to settle at 80,182.20, taking its downtrend to the third day on Wednesday. The Nifty declined 137.15 points or 0.56% to 24,198.85.