Stock markets registered a sharp fall on Friday with the Sensex taking a 253.37-point plunge to close below the 16,000 mark as rising worries about Indias slowing economy,slowdown in China and worsening global risk aversion kept investors away.
The Sensex which opened flat,quickly slipped into a negative zone and closed at 15,965.16 points. The fall was triggered by weaker global shares after surveys showed Chinese factory output barely growing and powerful European manufacturing countries falling deeper into the malaise. The NSE 50-share Nifty also fell by 82.65 points to 4,841.60.
The rupee,meanwhile,gained 54 paise to end at 55.54 against the dollar on persistent dollar selling by exporters with the RBI hinting at the possibility of opening a separate dollar window for oil firms. However,with a 0.3 per cent on the week,the domestic currency posted a ninth consecutive weekly drop,worst losing streak since the Lehman crisis.
The overseas capital flows have turned negative in the wake of the controversy over GAAR,Vodafone tax dispute and weak economic fundamentals, Amar Ambani,head of Research,IIFL,said. Investors wealth,or market capitalisation,declined by Rs 91,000 crore. Capital goods,power,auto,refinery and IT indices logged losses of at least 2 per cent while shares of banking,metal,realty,PSUs and healthcare sectors also moved down. In the Sensex pack,27 of the 30 stocks ended the session with losses with Tata Motors emerging as the biggest loser with a fall of 3.73 per cent.
The BSE Mid-Cap index fell 1.46 per cent,while the BSE Small-Cap index fell 1.22 per cent. Eighty two percent of the 246 mid-cap scrips declined,while 70 per cent of the 535 small-cap scrips declined on the BSE.
Major mid-cap losers included Fresenius Kabi (17.1 per cent),Pantaloon Retail (7.8 per cent),Arvind (7.3 per cent) and Apollo Tyres (6.1 per cent) while small-cap losers included Gati (7.6 per cent),Vardhman Textiles (7.3 per cent),Phillips Carbon (6.8 per cent),IVRCL (6.3 per cent) and NIIT (6 per cent).
Interestingly,on Friday,the Sensex fell 1.56 per cent,a tad higher than the declines seen by BSE Mid-Cap and BSE Small-Cap indices. Between February 21,the day the Sensex touched the years high of 18,428,and now,the Sensex is down 13.36 per cent,compared with the fall of 11 per cent for the BSE Mid-Cap and 12.9 per cent for the BSE Small-Cap indices.
Cant arrest Rupee fall if driven by weak fundamentals: RBI
Even as the rupee gained 54 paise to end at 55.54 against the dollar on Friday,the Reserve Bank of India made it clear that it cannot arrest the rupees decline if its caused by weak fundamentals or global factors. If the rupee fall is due to fundamental weakness of the economy,or due to global factors,then the RBI cannot support it, RBI Deputy Governor K C Chakrabarty said. Meanwhile,The Deputy Governor Subir Gokarn said that the RBI is looking at all measures to defend the depreciating rupee and has not ruled out the option of a special window to sell dollars to oil companies.