Stock markets update: Equity benchmark indices declined in early trade on Monday amid weak trends in Asian markets and unabated foreign fund outflows. In the early trade, the 30-share BSE Sensex fell 800.29 points to 76,580.62. Meanwhile, the Nifty also declined 218.40 points to 23,213.10.
The decline follows a better-than-expected US payrolls report released on Friday, which led to a sell-off on Wall Street and drove Treasury yields higher. The robust labour market data has added uncertainty to the US Federal Reserve's plans for potential interest rate cuts, casting a shadow over global equity markets.
Additionally, persistent selling by foreign institutional investors (FIIs) has further dampened market sentiment in India. On Friday, FIIs net sold Indian equities worth Rs 2,254.68 crore, continuing their streak of withdrawals. However, domestic institutional investors (DIIs) provided some support by net buying shares worth Rs 3,961.92 crore during the session.
Market outlook remains cautious
Market analysts predict that Indian indices will remain under pressure in the near term, with global factors, including US monetary policy and institutional investment trends, dictating market movements. Investors are advised to stay cautious and closely monitor developments in the international and domestic arenas.
Rupee against dollar
The rupee's slide show went on for the second straight session on Monday as it crashed 27 paise to hit a new lifetime low of 86.31 against the US dollar, dragged down by a robust American currency amid volatile global cues. A record surge in crude oil prices, sustained outflow of foreign capital, and a negative trend in domestic equity markets also kept the Indian currency under pressure, forex traders said.
The dollar, they said, strengthened on better-than-expected job growth in the US market, which also fuelled the benchmark treasury yields amid expectations of slower interest rate cut by the Federal Reserve.
At the interbank foreign exchange, the rupee opened at 86.12 and fell to the historic low level of 86.31 against the greenback in initial deals, registering a steep loss of 27 paise from its previous close.
(With PTI inputs)