Sensex loses 708 points; Emphasize sales with caution

Mumbai After two consecutive sessions of gains, investors in the capital markets turned cautious again and on Wednesday preferred to sell for profit. Shares of Reliance, the largest contributor to the domestic capital market, fell sharply on the back of a global sell-off.

The rupee’s rally against the US dollar to a record low has also had a negative impact on market sentiment as foreign institutional investors are actively selling shares again.

At the end of the day, the Sensex fell by 709.54 points, or 1.35 per cent, to close at 51,822.53. The Nifty fell by 225.50 points, or 1.44 per cent, to 15,413.30.

The last two sessions had witnessed strong winds in the capital markets. However, in a climate of financial instability, the market is unlikely to sustain this momentum. Moreover, there is no concrete reason for the momentum to continue. International crude oil prices have started rising again after falling. There is currently no positive reason to believe that this will lead to buying in the market. At the same time, the rupee is strengthening globally against the local currency and rising interest rates in the US have boosted foreign exchange rates, making it unlikely that foreign investors will change their equity policy at present, said VK Vijayakumar, chief investment strategist at Geojit Financial Services. In the Sensex, Tata Steel fell the most at 5.24 per cent. It was followed by Wipro, Reliance Industries, IndusInd Bank, HCL Technology, Bajaj Finsworth, Titan and Bajaj Finance.

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