Published: Sat, December 03, 2016
Economy | By Melissa Porter

USA rate hike fears spook investors, equities trade in the red

USA rate hike fears spook investors, equities trade in the red

Investors fear that upbeat USA economic data has strengthened the case for a rate hike in the United States, sparking capital outflows from emerging markets.

The rupee fell to as low as 68.87 per dollar, surpassing its record low of 68.85 hit in August 2013, as the greenback remained strong over the prospect of higher USA interest rates.

The NSE 50-share Nifty, too, dropped 67.80 points, or 0.84 per cent, to close below the crucial 8000-level to 7965.50.

The Sensex touched a high of 26,049.14 points and a low of 25,810.97 points during the intra-day trade so far.

The BSE market breadth was skewed in favour of the bulls - with 1,182 advances and 299 declines.

The Asian markets were trading mostly in green; Shanghai Composite increased 6.89 points or 0.21% to 3,255.24, KOSPI Index increased 10.17 points or 0.51% to 1,993.64, Taiwan Weighted increased 43.31 points or 0.47% to 9,176.70 and Hang Seng increased 49.77 points or 0.22% to 22,727.84.

"The minutes of the US Federal Reserve, which were released on Wednesday evening, suggested a possible rate hike next month". Overseas, Asian markets gained in the wake of solid gains in United States stocks, while the Japanese yen briefly strengthened after a powerful quake which rocked northern Japan appeared to have been taken in stride by investors. The index has also wiped out all the gains it had accrued in 2016.

The Auto and Metals index witnessed massive recovery, closed up by 362 points and 266 points, respectivley. Foreign Institutional Investors (FII) stood net sellers in domestic equity markets on Tuesday and sold shares worth of Rs 1,241.01 crore.

November series was the worst for market in the last three years.

Among BSE sectoral indices, Bankex fell 1.45%, followed by auto (1.34%), realty (1.25%), finance (1.11%), healthcare (1.03%), energy (0.92%), consumer durables (0.85%) and industrials (0.81%).

The top gainers on the Sensex were Larsen & Toubro up by 2.99%, Asian Paints up by 2.96%, Tata Steel up by 2.02%, Lupin up by 1.51% and Tata Motors up by 0.94%. However, IT rose by 1.23% and Teck 0.73%.

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