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Last Updated : Nov 21, 2013 05:40 PM IST | Source: Moneycontrol.com

Fed tapering woes drag Sensex by 406 pts; banks hit hard

Country‘s largest lenders State Bank of India, ICICI Bank and HDFC Bank lost 2 percent each. ITC and L&T dropped nearly 3 percent.


Moneycontrol Bureau


The 30-share BSE benchmark crashed more than 400 points on Thursday as investors sentiment was dampened after FOMC minutes indicated that Fed may scale back its fiscal stimulus sooner than expected, depending on economic conditions.


The market has been repeatedly confused about when the Fed will begin to scale back its USD 85 billion monthly bond buying purchases (quantitative easing).

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"The taper will occur well after the first quarter in 2014," Christopher Palmer of Henderson Global said.


Equity benchmarks continued to slide for the second consecutive session today. The Sensex was down 406.08 points or 1.97 percent to 20,229.05 while the Nifty fell 123.85 points or 2.02 percent to close tad below the 6,000 level at 5,999.05.


Technical analyst Gautam Shah of JM Financials believes 5950 is a firm base and does not see market breaking below that. "The Nifty will continue to stay in the consolidation phase for next couple of weeks and trade in the range of 5950-6250," Shah adds.


Meanwhile, according to Fitch Ratings, India's narrowing current account deficit will not be enough to shield the country from pressures tied to Fed tapering, reports Reuters.


"(India's ratings) already incorporate both the sovereign's vulnerabilities and tolerance for volatility in global financial market conditions," Fitch report said.


Banks were hit very hard, with the BSE Bankex falling 2.5 percent followed by Capital Goods, Realty, Power, FMCG, Metal, Oil & Gas and IT indices with 1.5-2.4 percent cut.


IndusInd Bank, Axis Bank and Sesa Sterlite plunged 4 percent each. HDFC and PNB were down 3.6 percent each.


The country's largest lenders State Bank of India, ICICI Bank and HDFC Bank lost 2 percent each. ITC and L&T dropped nearly 3 percent.


Meanwhile, the domestic currency, too, got impacted by Fed tapering fears as the rupee fell 30 paise to 62.87 against the US dollar (at 16:30 hours IST).



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First Published on Nov 21, 2013 04:54 pm
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