Fed rate hike jitters send Sensex crashing 444 points

Caution also prevailed ahead of key macroeconomic data — IIP for July and retail inflation for August — scheduled to be released after the market closing on Monday.

The broader markets too remained under pressure, with the BSE mid-cap index slumping 2.95 per cent — its biggest fall in six months —and the small-cap shedding 2.35 per cent. 

However, when all the sectors fared poorly, only BSE IT and Tech indices managed to keep their heads up, logging gains of 0.87 per cent and 0.26 per cent, respectively. This uptick was fuelled by buying in Infosys, TCS and Wipro, which were three of the only four stocks on the BSE to rise. 

Investors feared that a possible rate hike by the US Federal Reserve as early as next week could reverse dollar flow into the country, leading to fall in banking as well as metal stocks. Tata Steel was the biggest loser from the Sensex pack on the day — dropping 5.30 per cent to Rs 373.60 — when it also reported widening of losses. 

“Global liquidity was a very important factor for the uptick in Indian market which has been put in question by Fed and ECB, leading to a sharp spike in global bond yield,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial.

The Sensex opened lower at 28,481.09 and dropped further to 28,251.31 before ending at 28,353.54, showing a fall of 443.71 points or 1.54 per cent. The index had dropped by 604.51 points on June 24 due to Brexit fallout.