The Sensex fell 1,045.46 points (1.44 per cent) to 71,593.24 on Thursday and the Nifty 50 fell 371.25 points (1.64 per cent) to 22,231.80, which 5paisa describes as an 18-month closing low and the biggest one-day fall in three months. The VIX rose about 10 per cent. Business Standard said oil topped
Three pressures met on one day: dearer oil, higher US yields, and foreign selling. A rate hike at home did not stop any of them, which tells you the market is trading global factors, not RBI policy.
If you invest through SIPs, a fall means you buy more units for the same amount, which is the point of a systematic plan. If you need the money soon, this is the day that shows why equity is for long horizons. Fuel and imported goods may get dearer if the rupee weakens.
A 1.4 per cent fall after a strong two-day run is a correction, not a collapse. Earnings are growing, the RBI has raised its growth forecast to 7.1 per cent, and foreign selling cannot last forever.
Oil above
Brent and the rupee will tell you more than the Nifty. If oil stays above
Business Standard (close; oil; VIX) · 5paisa (18-month low) · Outlook Money (causes; Fed minutes) · Hindustan Times (Pentagon) · ThePrint/Bloomberg (rupee) · ET BFSI (margins) · Livemint (Oct 8) · Sensex 32-month low rests on one report
Sensex tanks 1,045 points and Nifty ends at 22,232, an 18-month low, as oil tops $104 and the Fed's minutes point to another hike
It is the biggest one-day fall in about three months. Foreign investors kept selling, the VIX jumped 10 per cent, and a day after the RBI's hike the rupee stayed near its record low.
Indian equities had their worst day in about three months on Thursday. The Sensex fell 1,045.46 points, or 1.44 per cent, to 71,593.24, and the Nifty lost 371.25 points, or 1.64 per cent, to 22,231.80, which 5paisa describes as an 18-month closing low. The volatility index rose about 10 per cent. Business Standard said crude oil topped $104 a barrel. Hindustan Times reported that the US administration has asked the Pentagon to prepare options for a possible resumption of strikes on Iran, which raised worries about energy supply. Wall Street had ended lower on Wednesday as Treasury yields climbed, and the minutes of the US Federal Reserve's last meeting indicated that another rate increase might be needed before the end of the year, according to Outlook Money.
Home factors added to the pressure. The foreign institutional investors who have been selling all year continued to sell, and analysts told the outlets the market was still adjusting to the RBI's shift to a tightening stance and its 25-basis-point hike a day earlier. The rupee remained under strain. Bloomberg, quoted by ThePrint, said it was within about 0.2 per cent of its record low of 96.97, with traders pointing to RBI intervention; we could not confirm the official close for the day. Banks may see a short-term boost to margins from the hike, Economic Times BFSI noted, but it also warned that costlier credit in the festive season could dent consumption. TCS began the earnings season with its second-quarter results and a dividend.