Share Market Update: Sensex Tanks 587 Pts, Nifty Below 10,750 As Stimulus Hopes Dim; Yes Bank Dives 14%
Domestic benchmark indices BSE Sensex and NSE Nifty closed deep in the red on Thursday slumping to their lowest mark in the last six months as the top government officials ruled out stimulus packages for loss making sectors.
Traders believe that the weakening of rupee, which hit its lowest level in eight months, and lacklustre global cues further weighed on investor sentiment. Both the key indices closed lower for the third straight session. Yes Bank was the biggest laggard in the Sensex pack, plummeting 13.91 per cent, followed by Vedanta, Bajaj Finance and Tata Motors, which declined up to 7.76 per cent.
ONGC, SBI, Hero MotoCorp, ICICI Bank, Tata Steel, HDFC twins and RIL also closed with losses. Tech Mahindra, TCS, HUL and HCL Tech were the only gainers, spurting up to 1.57 per cent. IT index was the sole gainer, rising 0.30 per cent, buoyed by a weak rupee. Meanwhile, BSE realty index was the biggest sectoral loser, cracking 6.01 per cent, followed by metal, finance, oil and gas, bankex and energy.
Chief Economic Adviser Krishnamurthy Subramanian on Thursday said using taxpayers' money to bail out companies going through a 'sunset' phase will create moral hazards and such a step is an anathema to the market economy. Speaking at an event in Delhi, Subramanian stressed on the cyclical nature of a market economy.
"If we basically expect the government to use taxpayers' money to intervene every time when there are some sunsets, then I think you introduce possible moral hazards from 'too big to fail' and as well as the possibility of a situation where profits are private and losses are socialized which is basically an anathema to way the market economy functions," he said.
The broader BSE midcap and smallcap indices followed the benchmarks, closing up to 2.19 per cent lower. Globally, markets were jittery ahead of comments from Federal Reserve Chair Jerome Powell at Jackson Hole, Wyoming, US. The Indian rupee depreciated 33 paise to 71.88 against the US dollar intra-day. Brent crude futures, the global oil benchmark, rose 0.65 per cent to USD 60.69 per barrel.
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