Press Trust of India
Mumbai, August 12: Market continued to feel the heat from yuan devaluation as the benchmark BSE Sensex extended its loses for the fourth straight session to fall by 384 points Wednesday, while no positive developments on key reform bills added to the rout. Taking no comfort from sharp correction in global stocks, the barometer index slipped to 27,512.26, its lowest closing since July 28.
The yuan has fallen almost 4 per cent in last two days, leading to industries including steel, engineering products and textiles anticipating a hit from the Chinese central bank’s move to devalue its currency to boost exports. A weaker yuan is also expected to pressure other central banks in the region to devalue their currencies to keep their exports competitive against China, brokers said.Taking a hit, the rupee tumbled by 60 paise to nearly two-year low at 64.78 against the dollar Wednesday.
“Markets nosedived on global weakness which was caused on fears of further devaluation of China currency yuan… it seems unlikely to pass GST bill in this Monsoon Session of Parliament,” said Gaurav Jain, Director, Hem Securities. The 30-share Sensex plunged 353.83 points or 1.27 per cent to close at 27,512.26. It had lost 432.04 points in the previous three straight sessions. Of the 30-share Sensex pack, 23 lost while 7 gained. NSE Nifty index went below the crucial 8,400-mark before settling lower 112.90 points or 1.33 per cent at 8,349.45.
Shares of realty, metal, refinery, banking, auto, power, capital goods and FMCG declined sharply on heavy selling. But IT was the silver lining as Infosys, TCS and Wipro rose up to 3.39 per cent, backed by a firming dollar. Globally, stock markets remained shaky after China lowered the value of its currency for the second day in a row, aggravating worries about the health of the world’s numbertwo economy.
“Yuan’s surprise devaluation for the second day has stoked fears of a competitive devaluation, at least among emerging economies and has thrown the currency dynamics into a fresh flux,” said Anand James, Co Head Technical Research Desk of Geojit BNP Paribas. All major indices in Asia ended lower while those in Europe were quoting in the red in early trade.
