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Stocks lose nerve

Mumbai: The Sensex on Tuesday caught the rupee flu, crashing 509 points to close at more than a one-month low of 37413.13. The index has slumped over 976 points in the past two trading sessions, making investors poorer by Rs 4.14 lakh crore.

Bonds, too, fell victim with yields on the benchmark 10-year security ending at 8.18 per cent against the previous close of 8.15 per cent. Yields are inversely related to prices.

On the equity markets, the fall intensified as investors fretted over the falling rupee, which slid to a new lifetime low of 72.73 in afternoon trade.

Rising trade tensions between the US and China and surging crude oil prices further dampened sentiment. In Asian trade, international benchmark Brent crude again went past $78 to trade at $78.52 a barrel amid looming US sanctions against Iran's petroleum industry.

"The stock markets continued to trade under pressure on the second trading session of the week. Selling pressure intensified as negative Asian cues and global trade war concerns impacted investor sentiment. Both the benchmark Sensex and the Nifty nosedived towards the end of the trading session to finally close the day with losses of over one per cent," said Abhijeet Dey, senior fund manager-equities, BNP Paribas Mutual Fund.

Analysts added that the falling rupee has also led to concerns that the Reserve Bank of India may hike interest rates in its monetary policy next month with some not ruling out the possibility of even an out-of-turn hike.

The 30-share Sensex opened marginally higher at 38017.49 but started heading southwards in post-noon trade. It hit a day's low of 37361.20 and closed with a hefty fall of 509.04 points, or 1.34 per cent, at 37413.13. This is the weakest closing since August 2 when it had ended at 37165.16. It had lost 467.65 points in the previous day.

The 50-share NSE Nifty cracked below 11300 by falling 150.60 points, or 1.32 per cent, at 11287.50. Intra-day, it shuttled between 11479.40 and 11274.

In the Sensex pack, barring six stocks all ended in the red. Tata Steel recorded the biggest fall of 3.46 per cent, followed by PowerGrid at 3.21 per cent.

While investors are now awaiting the retail inflation numbers which will be declared after market hours on Wednesday, the markets will be closed on Thursday on the occasion of Ganesh Chaturthi.

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