Sensex Plunges 900 Points On Weak Global Cues, Rupee Hits Historic Low

Benchmark indices came crashing down for the second straight trading day, with the Sensex falling a huge 900 points and the Nifty diving by 297 points.

A weak rupee raised worries that the RBI would hike interest rates even sharper, with 50 to 60 basis points now almost certain. The rupee hit a new historic low of Rs 81.51 to the dollar.

Banking stocks which had seen a substantial rally in the last few days were the worst impacted.

IndusInd Bank which had rallied sharply in the last few days, lost heavy ground for the second successive day in a row. The stock was down more than 3% in trade. Among the other losers were Hindalco, Power Grid and Tata Motors. Stocks that managed to stay resilient were largely from the IT pack including names like Infosys and HCL Tech, which gained on the back of a weak rupee.

Meanwhile, shares in the Asia-Pacific fell sharply on Monday as negative sentiment continues to weigh in on markets.

The Nikkei 225 in Japan dropped almost 2% in early trade, and the Topix slipped 2%. South Korea's Kospi too lost 2.3%.

All eyes are now on the country's central bank, for a hike in interest rates later this week. A hawkish tone would mean faster interest rates rise over the coming months.