Home >> Business

Sensex Recovers After 450 Point Fall, Rupee Rebounds

Sensex Recovers After 450 Point Fall, Rupee Rebounds - With help from a strong opening in European markets and buying at lower levels, Indian stock markets started off on a high on Tuesday, with the BSE Sensex climbing around 380 points in opening trade, but panic selling in equities was triggered by a sharp selloff in China shares. The rupee also slipped in the red.

Here are the latest developments:

At their day's lows, the Sensex slumped nearly 450 points, while the Nifty hit 7,667 - their lowest levels in a year. But sharp gains in major European markets helped Sensex recover from lower levels. At 12:37 p.m., the Sensex was up 42 points at 25,783 while Nifty edged higher to 7,821.

The rupee slipped 12 paise to 66.76 per dollar after earlier pulling back to 66.39. Analysts predict that a breach of 67 per dollar can accentuate the selloff in domestic stock markets.

India's volatility index was up 17 per cent today after earlier hitting its highest level since May 2014. The gauge surged 64.4 per cent on Monday.

Over the last three sessions, foreign investors, who own around 25 per cent of BSE 200 stocks, have sold shares worth nearly Rs 9,000 crore, troubling Traders about the increasing momentum of selling by foreign investors.

Most traders are bearish on markets and have gone short, said CK Narayanan of Growth Avenues. Investors are also facing payment problems, which is creating down side pressure, he added.

Worries that the Chinese economy, the world economy's most important engine, has not met Beijing's 7 per cent growth target for 2015, has affected global stocks.

Analysts say Indian markets will continue to fall till the situation in China stabilizes.

Asian markets, which traded higher in the morning tracking some recovery in China, fell sharply. Japan's Nikkei index closed 4 per cent lower.

US stock futures traded 1 per cent higher, indicating some respite from selling on the Wall Street when it opens later in the day. Overnight, the Dow Jones Industrial Average briefly fell more than 1,000 points. It closed down 588.4 points, or 3.57 per cent, at 15,871.35.

Prime Minister Narendra Modi has been briefed, by Finance Minister Arun Jaitley, on the selloff yesterday evening. Mr. Jaitley called for further corrective action to strengthen the Indian economy but warned that be a matter of just a day or two.