The rupee on Monday welcomed the new year with a bang surging ahead to close at a fresh five-month high of 63.68, gaining 19 paise against the US dollar, despite a fall in the stock market.
With this, the rupee has gained 47 paise in the last three sessions. This is also the highest closing for the domestic currency since August 8, 2017 when it had settled at 63.63. Banks and exporters unloaded dollars in the face of extremely bearish sentiment for the US dollar overseas and expectations of robust capital inflows into the country on the back of new economic policy measures. India had received over Rs 2 lakh crore foreign inflows into the equity and debt markets in 2017.
However, led by auto, banking and IT shares, the benchmark BSE Sensex fell from a record high level to close down by 244 points, its biggest single loss in past one month, on the first trading day of 2018. Investors preferred to book profits amid concerns over fiscal slippages and rising crude oil prices and absence of cues from global markets which were closed for the New Year holiday.
The Sensex touched a low of 33,766.15 before settling lower by 244.08 points, or 0.72 per cent, at 33,812.75. This is the biggest single-day fall since December 1 when the index had lost 316.41. The 30-share index had closed at an all-time high of 34,056.83 in the last session of 2017 on Friday.
The 50-share Nifty cracked below the 10,500-mark to hit a low of 10,423.10 before settling 95.15 points, or 0.90 per cent down at 10,435.55.
Stocks opened on a weak note and remained range-bound for the better part of the day but an intense sell-off in the last hour of the trade dragged the key indices down. Shares of capital goods, realty, healthcare and consumer durables companies also witnessed losses.
TCS declined by 1.69 per cent, followed by IndusInd Bank 1.45 per cent and Hindustan Unilever 1.40 per cent. Other big losers include HDFC, Tata Steel, ONGC, Adani Ports, ICICI Bank, Reliance Industries, Asian Paint, HDFC Bank, SBI, Kotak Bank and Yes Bank, dropping by up to 1.35 per cent. Tata Motors, Bajaj Auto, M&M, Maruti Suzuki and Hero MotoCorp too came under pressure and lost up to 1.35 per cent after December sales data failed to cheer investors. Maruti reported a 10 per cent rise in December sales.
“Despite positive auto sales numbers, market started-off the New Year on a cautious note. Lingering concern on fiscal slippages and a sharp up-move in crude prices dampened investor sentiments. Additionally, an expectation of weak monthly manufacturing data tomorrow is adding to the cautiousness,” Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.
The BSE auto index fell 0.78 per cent, followed by bankex 0.75 per cent, teck 0.65 per cent, IT 0.55 per cent, metal 0.52 per cent, oil & gas 0.46 per cent, FMCG 0.29 per cent, PSU 0.15 per cent and infrastructure 0.13 per cent. With many overseas markets closed for new year, investors remained directionless, forcing to cut their positions. Small-cap and mid-cap indices closed with gains of 0.26 per cent and 0.08 per cent, respectively.
“Domestic indices succumbed to profit booking pressure with most of the global markets closed on the first day of the new year. Volatility index rose by over 5 per cent as the investors exhibited caution ahead of the US FOMC minutes later this week and domestic inflation data release scheduled next week. Persistent agitations from the Korean peninsula also added to investors’ anxiety,” said a dealer. While expectations on the union budget and government’s measures to revive the PSU bank sector are expected to boost the market in the new year, concerns over the macro numbers especially with the soaring oil prices will be a nagging worry for the markets.