The market capitalization of all BSE-listed companies fell to Rs 270 billion, leaving investors on Dalal Street Rs 4.3 billion poorer.
Foreign institutional investors, or FIIs, have shifted from buyers to sellers in the market due to macroeconomic concerns. FIIs have sold over Rs 7.6 billion worth of Indian stocks, totaling approximately Rs 1.5 billion in net sales so far this month. Yesterday’s sale was Rs 2,139 crore.
“India’s outperformance so far justified profit booking for FIIs today as geopolitical and currency risks came to the fore,” said S Ranganathan, head of research at LKP Securities .
Asian shares were mostly weaker on Tuesday as worries about aggressive rate hikes by the US Fed rose. South Korea’s Kospi fell 1.83%, Hong Kong’s Hang Seng fell 2.2% and Japan’s Nikkei225 ended 2.64% worse.
As the blue-chip FTSE 100 fell 1.1%, marking its fifth consecutive day of losses, the mood was also somber on European bourses.
The yield on 10-year U.S. Treasuries hit 3.99% earlier in the day on speculation that the Fed may choose to implement another 75 basis point hike in the first few weeks of November in an effort to fight inflation after a positive employment report.
Despite support from the RBI, the Indian rupee rose 5 paise today to close at 82.35 against the US dollar, but the domestic currency’s deterioration has hurt stocks. Currently, the rupee has lost 11% of its value against the dollar. Today, the US dollar index was above 113.
When he predicted that a recession will occur in the next 6 to 9 months, Jamie Dimon, CEO of JP Morgan, added to the pessimism of the market.