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Spooked St extends drop to 1264 points in seven straight sessions

Extensive selling by investors ahead of the expiry of September derivatives and weakness in the rupee amid mixed global cues, weighed on sentiment

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Spooked St extends drop to 1264 points in seven straight sessions
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    Dalal Street witnessed a drab show on Wednesday yet again after equity indices tumbled for the seventh consecutive session.

    The Sensex tanked 439.95 points, or 1.39%, to close at 31159.81. The NSE Nifty, on the other hand, cracked below the key 9800-mark plunging 135.75 points, or 1.38%, to wrap up the session at 9735.75. The index closed at its lowest on Wednesday since August 11 when it closed at 9710.80.

    So far in the last seven sessions, the benchmark Sensex has plummeted a total of 1263.95 points, or 3.90%, while Nifty has witnessed a loss of 417.35 points, or 4.11%.

    Widespread selling by foreign institutional investors (FIIs) was seen on news Indian army conducted another surgical strike alongside Indo-Myanmar border hitting Nationalist Socialist Council of Nagaland-Khaplang (NSCN-K).

    Extensive selling by investors ahead of the expiry of September derivatives and weakness in the rupee amid mixed global cues, weighed on sentiment. On the NSE, 187 stocks advanced, compared with 1257 stocks declining, and 30 stocks remaining unchanged.

    From the Sensex block, Adani Ports barrelled down 4.85%, followed by State Bank of India that fell 2.89%. Weakness in heavyweight Reliance Industries, Dr Reddy's, Sun Pharma and ICICI Bank, deepened losses. Reliance and State Bank of India were the worst performers of the day. HDFC, HDFC Bank, ITC and Larsen & Toubro, too lost steam.

    However, TCS led the pack of gainers rising 0.62% while Coal India rose too.

    Weakness will persist going into expiry today and markets are likely to slip to 9500 levels in the short term, say experts. The rupee fell to new lows quoting at over six-month low of 65.75 against the dollar. Further weakness could brew more trouble for the currency, experts are of the view. Fears of foreign-capital exit sooner than later after US Federal Reserve (Fed) chair Janet Yellen's comments that the central bank should stick to gradual rate hikes despite the uncertainty about inflation trajectory, drained out the local currency. However, IT companies held up based on the depreciating rupee.

    Experts do not recommend any buying at this juncture and see markets slipping to 9500 in the short term.

    Deepak Jasani, head-retail research, HDFC Securities had earlier told DNA Money,"Strengthening of dollar and a weakening rupee, earnings that are taking time to revive and FII outflows, have led to the fall in markets. The next two weeks may witness Nifty retreating to 9650."

    Mid-cap and small-cap stocks moved down up to 2.10%.

    Stocks of Divi's Lab crashed 11.60% to Rs 850.15 after the company said it has received six new observations from the US Food and Drug Administration (USFDA) after inspection of its Visakhapatnam unit.

    BSE realty index was down 2.66% on the back of across-the-board selling. Healthcare, capital goods and power stocks also kept low.

    Foreign portfolio investors continued to keep Indian shares at bay seeking instruments that would yield higher returns. The FPIs net sold shares worth Rs 1,915.54 crore. Domestic institutional investors (DIIs) picked up shares worth a net Rs 1,537.10 crore on Tuesday, according to data.

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