It’s a gap-down opening on the market on this Monday morning, with the Nifty shedding 90 points in the opening tick. The Sensex is lower by over 200 points.
Weakness in Asian markets along with a further selloff in rupee, which fell 1 percent, are weighing on the indices.
The Sensex is down 248.84 points or 0.65% at 37841.80, while the Nifty is down 90.20 points or 0.78% at 11425.00. The market breadth is negative as 318 shares advanced, against a decline of 342 shares, while 93 shares were unchanged.
Yes Bank, Tata Motors, Indiabulls Housing and Titan are the top losers, while Wipro, TCS, and HCL Technologies have lost the most.
The Indian rupee slipped in the early trade on Monday. It opened lower by 67 paise at 72.52 per dollar versus 71.85 Friday.
The government on Friday announced an array of steps, including removal of withholding tax on Masala bonds, relaxation for foreign portfolio investors and curbs on non-essential imports to contain the widening current account deficit (CAD), which has widened to 2.4 percent of GDP in April-June, and check the rupee’s fall against the dollar.
Navneet Damani of Motilal Oswal Financial Services said, "The recent high is likely to pose short-term resistance to the pair and consolidation within support at Rs 70.80-71.30 and resistance at Rs 72.50-72.90 zone could be expected for the next 1-2 weeks."
HDFC Bank in its report on the government measures said that the steps may not result in a significant shift in fund flows. Further, it added that the measures are better suited when the sentiment in global markets is positive.
Meanwhile, HSBC believes that the steps were announced to encourage inflows and boost the rupee. Having said that, policy action will need to get the sequencing right in order to be effective, it said, adding that it is expecting 50 basis points rate hike in Q4CY18.
Meanwhile, rupee has extended its losses from its opening levels. The currency fell to 72.67 per US dollar mark in the morning trade as investors may not have been impressed by the government measures announced over the weekend.
On Friday, the government announced a five-point strategy to arrest the rupee’s slide, after a late evening meeting that the prime minister took with Jaitley and Reserve Bank of India (RBI) Governor Urjit Patel, among others.
The measures include removal of withholding tax on Masala bonds, relaxation for foreign portfolio investors and curbs on non-essential imports to contain the widening current account deficit (CAD), which has widened to 2.4 percent of GDP in April-June, and check the rupee’s fall>