Sensex cracks below 36k-mark ahead of RBI policy; 5 key points to note

The Indian stock markets continue to trend on negative note, and today was no different. In fact, Sensex has now cracked below 36,000-mark. The 31-scrip index ended at 35,975.63 below 550.51 points or 1.51%. The reason can be attributed to weak rupee and upcoming Reserve Bank of India (RBI) policy. RBI governor Urjit Patel along with other Monetary Policy Committee (MPC) members will present the fourth bi-monthly monetary policy of India for fiscal year FY19. What scares investors is continues free fall in rupee, which may force RBI to once again hike policy repo rate by 25 basis points. 

VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities said, "RBI refused to open a special window for oil marketing companies affected market sentiments.  Rupee touched a new low of 73.40 to a dollar. Sensex lost 550 points or 1.3% and fell to lowest level in the current downturn. Automobile stocks were battered as fears of margin compression came to fore."

Here's a list of five factors that were involved in dragging Sensex down. 

Large caps losers!

Majority of large stocks were worst performers on Sensex. The losers basket was led by Mahindra & Mahindra (M&M) taking lead ending at Rs 791.15 per piece down 6.66%. The company was joined by TCS at Rs 2162.45 per piece (4.14%), Axis Bank at Rs 570.70 per piece (3.91%), ICICI Bank at Rs 303.60 per piece (3.36%), Maruti at Rs 7251.60 per piece (2.86%), Kotak Bank at Rs 1099.25 per piece (2.24%) and Infosys at Rs 727.85 per piece (2.23%). 

Other renown companies that were losers list involved Bharti Airtel, Reliance Industries, Asian Paints, Hero Motocorp, Power Grid, Sun Pharma, Hindustan Unilever, NTPC, Wipro, SBI, Tata Motors and ITC. 

Banking, Auto, IT worst performer! 

Sensex bled due to massive bloodbath seen in banking, IT and auto stocks. 

The S&P BSE Auto index gave the most shocks, as it plunged by massive 626.60 points or 2.90% ending at 21,011.96. Losers involved - Eicher Motors, M&M, Bharat Forge, Hero Motocorp, Exide Industries, Apollo Tyre, Maruti, Balkrishna Industries, Tata Motors, TVS Motors and Motherson Sumi. 

Meanwhile, the S&P BSE Bankex ended at 27,835.27 down by 434.92 points or 1.54%. Losers on the index were SBI, Axis Bank, Federal Bank, ICICI Bank, Kotak Bank, Bank of Baroda, IndusInd Bank and  HDFC Bank. 

On the other hand, the S&P BSE Information Technology index finished at 15,650.91 lower by 356.62 points or 2.23%. Losers on this index were - 8K Miles, TVS Elect, TCS, Sasken, NELCO, NIIT, Aptech, Persistent, Infosys, Rolta India and Zen Technologies. 

Midcap on hotbed! 

The S&P BSE MidCap took heavy beating from investors, as it ended at 14676.48 down by 164.26 points or 1.11%. 

Heavy selling was seen in companies like IIFL, Shriram Transport Finance, Reliance Nippon Life Asset Management, PNB Housing, Muthoot Finance, TI Financial Holdings Ltd and Sun TV. 

Rupee having nervous breakdown! 

Ahead of the RBI policy, in the beginning of today's trading session, the  Indian rupee slid to 73.42 per US dollar -- the lowest-ever -- against the greenback at the Inter-Bank Foreign Exchange Market.

However, by end of trading session, the currency managed to recover 24 paisa to 73.18. 

Talking on rupee, Sharma said, "India's central bank is widely expected to raise its policy repo rate at a review on Friday in a bid to slow the rupee's decline and rein in inflationary pressures."

According to Sharma, other emerging currencies also weakened as dollar continue to strengthen. Oil prices has been sustaining on expectations of tighter supply once US sanctions start targeting Iran's petroleum industry from next month.

Global markets 

According to Reuters report, world shares were flat near two-week lows while MSCI`s index of Asia-Pacific shares outside Japan slipped 0.2 percent and Japan`s Nikkei closed 0.7 percent lower. China`s financial markets are closed and will resume trade on Oct. 8. 

Brent crude surged to $84.89 per barrel, close to four-year highs of $85.45 touched earlier this week. 

Reportedly, the european shares rose and Italian bonds rallied on Wednesday as some of the worries that have rippled across markets this week were soothed by signs Rome was amenable to cutting budget deficits and debt in coming years.