The Sensex fell 547.65 points to 71,924.68 and the Nifty 50 lost 157.10 points to 22,363.35 on October 12, after opening higher.
Several pressures overlapped. Foreign portfolio investors kept selling, crude oil was around 106 dollars a barrel, bond yields were higher and the rupee, though stronger at the open, remained near record lows.
The RBI acted over the weekend by tightening hedging rules and directing oil companies to source dollars away from the spot market. It had already raised the repo rate by 25 basis points to 5.5%.
For investors and companies, the question is whether these measures steady the rupee, as the early rally in the currency did not hold up equities.
The Nifty Midcap index was flat, while the Nifty Smallcap index rose 1.4%.
Among sectors, Nifty Media rose 4.6%, Realty gained 1%, Auto rose 0.9% and Pharma rose 0.3%, according to HDFC Sky.
IT, metal, private bank, PSU bank and FMCG indices each fell between 0.4% and 1%, according to the same report.
Among Nifty 50 stocks, ITC, Tech Mahindra, L&T, Hindalco and Hindustan Unilever were among the top losers, with falls of about 2% to 3%.
Dr Reddy’s Laboratories, Bajaj Auto, Tata Motors Passenger Vehicles, Bharat Electronics and BSE Ltd were among the top gainers, according to HDFC Sky.
The rupee opened stronger, about 94 to 98 paise higher at around 95.75 to 95.77 per dollar against Friday’s close of 96.73, according to India TV and Analytics Insight.
HDFC Sky said the early recovery in the rupee did not translate into sustained buying in equities, and no closing rupee level was given in the reports reviewed.
Over the weekend, the Reserve Bank of India directed oil companies to source their dollar needs away from the spot market and tightened rules on foreign exchange hedging, according to HDFC Sky.
BSE building, Mumbai (file image), Wikimedia Commons, CC BY 2.0