Equities close in red, Sensex recovers over 700 points

Bloodbath Continues On Stock Market; Sensex Falls 300 Points

The BSE Sensex closed 561 points lower at 34,195 while the NSE Nifty ended 168 points down at 10,498. On Monday, Wall Street recorded its biggest decline since 2008.

The benchmark BSE index was 0.86 percent lower at 34,766.63, after dropping as much as 1.56 percent.

According to Reuters, the Indian rupee fell in early trade, though retreated to 64.24/25 from Monday's close of 64.07.

On Friday, February 2, the latest U.S. jobs data was released spreading fear of inflation. Potentially higher bond yields also dampened sentiments in United States markets. Ahead of the conclusion of the second and final day of RBI's policy meet, investors appear to be caution about a more aggressive central banking authority and the new monetary policies it plans to unveil.

What exactly has accelerated the stock market sell-off? Taiwan shares lost 5%, its biggest since in 2011 and Hong Kong's Hang Seng Index dropped 4.2%.

Sensex now trading about 480 points, or 1.4 percent, lower at 34,264 points after paring some losses in line with a broad recovery in global markets.

Following the continuous sell-off, the market capitalisation of BSE-listed companies plummeted by Rs 9,90,476.93 crore to Rs 1,45,22,830 crore in six trading sessions. "Anxiety about the RBI policy and global market movement may influence investors to stay sideline". "However, it may be too early to really take a view on the direction of the markets at this point of time", said Vaibhav Agrawal, head of research, Angel Broking.

Govt concernedThe government will look into what it can do after a slump in local market reflecting global sell off, finance secretary Hasmukh Adhia said today.

The start was distinctly weak as the markets went into a free-fall. The positive data signalling a growth in the India's services sector also failed to cheer up the mood as investors continue to fret over the reintroduction of long-term capital gain (LTCG) tax on equity market investments.

India's volatility index (VIX) surged 35.9 percent to 21.815, highest since November 23, 016.

It was a sea of red as all the 30-share Sensex components were trading with losses led by Tata Motors.

Shares of Punjab National Bank fell 4% after the bank reported net profit of Rs230.1cr, (which was below estimates) against Rs207.2cr reported in corresponding quarter previous year. The intraday recovery came as USA index futures recouped early losses and pointed to some relief following the overnight slump.

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