Risk averse investors sell stocks ahead of Fed meet

Mumbai: The equity markets extended their losses for the fourth consecutive day tracking deep corrections in global stocks as risk averse investors booked profit ahead of the two-day meeting of the US Federal Reserve.

The growing fears about Britain exiting the European Union (EU) through a referendum later this month also kept investors on the sidelines. While domestic equities slumped on Monday, the fall was however moderate when compared to other major markets in Asia and Europe.  

The Sensex dropped 238.98 points or 0.90 per cent to end the day at 26,396.77 while the Nifty closed the day at 8,110.60, losing 59.45 points or 0.73 per cent.

Elsewhere in Asia, Nikkei 225 plunged 3.51 per cent while Hang Seng Index, Shanghai Composite Index and Taiwan SE Weighted Index slumped 2.52 per cent, 3.23 per and 2.06 per cent respectively. Most of the European markets also traded deep in the red. “The weakness in rupee due to anxiety over the upcoming FOMC and Bank of Japan  (BoJ) policy meet has shifted investor’s focus from riskier assets to safe haven assets like gold,” said Vinod Nair, head of research, Geojit BNP Paribas Financial Services.  

Stock market dealers said that the lower than expected industrial production (IIP) data released on Friday post market hours and expectation about an acceleration in consumer price inflation numbers also triggered heavy selling in interest rate sensitive banking sector stocks. ICICI Bank shares were the biggest loser among the Sensex constituents, down 3.38 per cent while SBI, HDFC and Axis Bank lost close to two per cent each.