Indian equity benchmarks ended near intra-day low points amid weak global trends as worries persisted about aggressive policy tightening by the Fed. Traders took note of a private report that interest rate hikes in the United States and the resultant pressure on the rupee is likely to give the Reserve Bank of India (RBI) reason to deliver a 50-basis-point rate hike on Friday even as it tries to protect a recovery in growth. The RBI’s monetary policy committee (MPC) has already hiked the key policy rate by 140 bps since May to 5.4%.

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The Sensex fell 509.24 points or 0.89% to settle at 56,598.28. During the day, it tanked 621.85 points or 1.08% to 56,485.67. The Nifty declined 148.80 points or 0.87% to end at 16,858.60.

The broader indices ended in red with the BSE Midcap index down by 0.47% and the Small cap index down by 0.43%. The few gaining sectoral indices on the BSE were Healthcare up by 0.46%, IT up by 0.28%, TECK up by 0.25%, and Auto was up by 0.08%, while Metal down by 2.32%, Bankex down by 1.52%, Energy down by 1.09%, PSU down by 1.09% and Utilities was down by 1.08% were the top losing indices on BSE.

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Major laggards from the Sensex pack were ITC down by 2.97%, Axis Bank 2.84%, Reliance 2.64%, Tata Steel 2.41%, IndusInd 2.07%, State Bank of India 2.04%, HDFC 2.02%, HDFC Bank 1.85%, Bajaj Finserv 1.70% and Titan Company 0.85%.

Among the gainers were Asian Paints up by 2.90%, Sun Pharma 2.21%, Dr Reddys Labs 2.03%, Power Grid Corp 1.42%, Nestle 1.23%, Hindustan Unilever 0.75%, and Tech Mahindra 0.69%.

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The rupee plunged 37 paise to close at an all-time low of 81.90 against the US dollar as the strengthening of the American currency overseas and risk-averse sentiment among investors weighed on the local unit.

Asian markets ended sharply lower with the Shanghai Composite down by 1.58%, the Hang Seng down by 3.41%, the Nikkei 225 down by 1.50%, and the KOSPI Composite down by 2.45%.

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European stock exchanges were trading lower in mid-session deals. The US stock markets ended on a mixed note on Tuesday.

“Investors continue to be skeptical of the domestic market’s higher premium amid the ongoing global deceleration while foreign investors are fleeing emerging economies in search of safer havens.

“Although the domestic economy is buoyed by solid fundamentals, the stock market’s appetite for risk has been hindered by the rising worries of a worldwide recession,” Vinod Nair, Head of Research at Geojit Financial Services, said.

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Brent crude, the international oil benchmark dipped 0.08% to $86.20 per barrel. According to stock exchange data, foreign institutional investors offloaded shares worth Rs 2,823.96 crore on Tuesday.