The BSE Sensex wiped off its initial gains in the second half of the trading session on Tuesday and closed 541 points down at 25,652. Nifty closed 165 points down at 7812.
Here are few reason why domestic equity markets plunged today:
1. Weak European Markets: Sentiments dampened after European shares fell on Tuesday in early trade, led lower by miners as copper prices slid on worries over Chinese demand, while the dollar hit its highest in almost two weeks after Federal Reserve officials signalled US interest rates could still rise this year.
2. F&O Expiry: Offloading of bets by participants ahead of September expiry in the derivatives segment on Thursday queered the pitch.
3. Weak Rupee: Fresh weakness in the rupee, which depreciated around 15 paise to Rs 65.8450 (intra-session) against the dollar, dampened mood.
4. Selling pressure: Metal stocks witnessed selling pressure on Tuesday after London copper hits a two-week low after China increased copper imports in August but not enough to absorb a surplus while jitters persisted over its appetite for metals. As a result, the BSE Metal index slid 4.24 per cent on Tuesday. Share price of Vedanta and Hindalco declined 6.29 per cent and 6.22 per cent to Rs 92.35 and 73.15, respectively.