Mkts cautious on FII outflows, weak rupee

Indian equity markets closed lower on Tuesday as persistent foreign institutional investor (FII) outflows, continued weakness in the rupee and subdued global cues kept investor sentiment cautious.

- FPJ News Service

The BSE Sensex declined 533.50 points to settle at 84,679.86, after slipping nearly 600 points intraday. The NSE Nifty fell 167.20 points to close at 25,860.10, with selling pressure spreading across sectors.

Market sentiment remained fragile as the rupee touched fresh record lows, weighed down by sustained foreign selling. Smalland mid-cap stocks underperformed the benchmark indices, while IT, metals, banking and realty shares led the losses. Consumption stocks offered only marginal support.

“Persistent FII outflows and currency weakness dragged domestic markets into negative territory,’ said Vinod Nair, Head of Research at Geojit Investments.

“Volatility is expected to remain elevated amid uncertainty over foreign inflows and currency movements. Stabilisation in the rupee and progress on the US-India trade talks will be key near-term triggers.”

Dr V. K. Vijayakumar, a veteran Investment strategist noted that the Reserve Bank of India has allowed the rupee to weaken in recent weeks, supported by low inflation and an improving trade balance. However, sustained foreign selling continues to exert pressure on both equities and the currency.