Sensex down 219, Re at 3-yr low

A host of factors like high oil prices, steep fall in the rupee value, slowdown in FII investment and geopolitical tension in Gulf sent the Indian financial markets into a turmoil on Wednesday.

A host of factors like high oil prices, steep fall in the rupee value, slowdown in FII investment and geopolitical tension in Gulf sent the Indian financial markets into a turmoil on Wednesday. The benchmark Sensex fell another 219 points on concerns that a falling rupee may slow foreign fund investment and higher oil prices could harm corporate earnings.

The rupee hit a three-year low of 47 per dollar as the US currency strengthened against the euro and the yen. Fresh dollar demand from oil companies as well as corporates added to the rupee8217;s fall.

8216;8216;There is a lot of pressure on the market as it heads down to 9,800-9,900 levels, even the die-hard investors are seen selling,8217;8217; said Sandeep Shenoy, strategist at Pioneer Intermediaries. 8216;8216;The buy side has disappeared and even valued stocks like ACC were hit in such a falling market.8217;8217;

With today8217;s fall, the index has shaved off 923 points 9.23 from its close of 10,930 on July 12, 2006. The BSE index was dragged down by heavyweight Reliance Industries which fell 2.2 to Rs 982.10 and bellwether Infosys Technologies which shed 1.5 to Rs 1,605.9.

Extending losses for the fifth straight day, the index had tanked all the way to a low of 9,972.73 at the fag end of trading as selling intensified. Selling pressure was witnessed across the board with auto, software and metal stocks at the forefront. The barometer index has witnessed a total movement of 435 points with a high degree of volatility.

Meanwhile, nervousness gripped interbank foreign exchange forex market and the rupee value was eroded by a whopping 29 paise on heavy dollar demand amidst a sharp fall in supplies.

Lack of exporter dollar sales and absence of central bank intervention to arrest the slide compounded to rupee woes even as it recovered fractionally from the day8217;s lows of 47.05 following Finance Minister P Chidambaram8217;s statement that the Indian currency is stable.