Fag-end buying triggered by strong European cues helped benchmark S&P BSE Sensex today partially recover from early losses to end 171 pts lower at 19,324.77 after positive US jobs data dragged rupee to record low.
The rupee breached the 61-level and fell to a record low of 61.21 per dollar in early trade as stronger-than-expected US jobs data fuelled concern that the US Federal Reserve will slow the pace of its monetary stimulus later this year.
Sensex-based counters ONGC,HDFC,Tata Motors,GAIL,Coal India,NTPC,ICICI Bank,RIL,TCS,HDFC Bank,M&M and SBI registered sharp-to-moderate losses. FMCG and IT shares closed with gains on good buying support. Banking stocks were hit as a weak rupee fanned worries that RBI may hold rates for now.
The 30-share Sensex resumed lower at 19,418.98 and dropped to a low of 19,185.92 before recovering some ground to end at 19,324.77,a decline of 171.05 points or 0.88 per cent.
The NSE 50-share index CNX Nifty fell by 56.35 points,or 0.96 per cent,to 5,811.55. Also,SX40 index,the flagship index of MCX-SX,closed 90.44 points lower at 11,535.44.
“Nifty opened on a weak note,taking cues from weaker Asian markets,as uncertainties over the US Federal Reserve continuing the stimulus program till year end were revived after positive US jobs data,” said Nidhi Saraswat,Senior Research Analyst at Bonanza Portfolio Limited. “The weakness in the rupee where it touched its record lows,breaching 61 level,also dampened the market sentiment.”
Asian stocks ended lower amid concerns that a credit squeeze in China will curb growth. Key benchmark indices in China,Hong Kong,Japan,Singapore,South Korea and Taiwan shed 0.45 per cent to 2.44 per cent.
However,European markets gained in early trade as investors waited for Alcoa Inc to kick off the US earnings season later in the day. Key indices in UK,France and Germany rose by 0.45 per cent to 2.23 per cent.
Overall,21 of the 30 Sensex scrips declined. The major losers were ONGC 3.49 per cent,HDFC 3.01 per cent,Tata Motors 2.70 per cent,GAIL India 2.63 per cent,Coal India 2.32 per cent,NTPC 2.23 per cent,ICICI Bank 2.21 per cent,M&M 2.09 per cent,Tata Steel 1.68 per cent,Sterlite Industries 1.61 per cent,Reliance Industries 1.35 per cent,TCS 1.23 per cent,Jindal Steel 1.16 per cent,SBI 0.92 per cent and HDFC 0.77 per cent.
Among the gainers,BHEL rose by 2.32 per cent,Wipro 1.5 per cent,ITC 1.39 per cent and Infosys 0.70 per cent.
Nine out of 13 sectoral indices closed with losses. The S&P BSE-Oil & Gas index dropped 1.94 per cent,the S&P BSE-PSU index 1.90 per cent,S&P BSE-Realty by 1.79 per cent,S&P BSE-Auto by 1.51 per cent,S&P BSE-Metal by 1.37 per cent and S&P BSE-Bankex by 1.06 per cent. The S&P BSE-FMCG index rose 0.72 per cent.
The market breadth turned negative as 1,264 stocks closed with losses and 1,050 finished with gains. The total turnover declined further to Rs 1,557.21 crore from Rs 1,626.52 crore last Friday.
BSE Sensex falls as Indian rupee hits record low,ICICI Bank shares hit
(Reuters) BSE Sensex fell on Monday led by lenders such as ICICI Bank as the Indian rupee’s slump to a record low sparked fears of continued foreign outflows and cemented expectations the Reserve Bank of India (RBI) would avoid cutting interest rates. However among stocks that gained,Reliance Communications Ltd shares surged 7 percent after earlier hitting its highest intraday level since Jan. 3,2011,after the company said it would spin off its real estate business into a separately listed unit.
The rupee fell to an all-time low of 61.21 as an emerging markets sell-off on worries of an early end to U.S. stimulus laid bare the vulnerability of a country dependent on capital inflows to fund its record current account deficit. Investors are now gearing up for a new earnings season that begins next week when Infosys Ltd unveils its June-quarter results on July 12,while also hoping for more government or central bank measures to boost foreign flows.
Earnings for the first quarter of the new fiscal year,which started in April,would help determine the outlook for shares and may help create a strong foundation for FY14 estimates,thereby supporting shares that have been hit hard by rupee volatility.
“While it seemed till the end of the previous week that market would gain some ground,the sharp rise in USD/INR has put brakes to bullish expectations,” said Milan Bavish,head of research at Inventure Growth and Securities.
The benchmark BSE index fell 0.88 percent,or 171.05 points,to end at 19,324.77.
The broader NSE Nifty fell 0.96 percent,or 56.35 points,to end at 5,811.55,closing below its 200-day moving average.
Deutsche Bank reduced the BSE index target to 21,000 from 22,500,citing faster-than-anticipated tapering down of U.S. monetary stimulus,India’s high short-term external financing needs and fears over a China slowdown.
The rupee will be a key determinant for stock markets,Deutsche added.
Lenders slumped,Housing Development Finance Corp Ltd fell 3.1 percent while ICICI Bank Ltd slipped 2.2 percent as rate cut hopes in the July policy have virtually disappeared after the rupee rout.
Among other blue-chips,Reliance Industries Ltd fell 1.5 percent and Oil and Natural Gas Corporation Ltd ended 3.9 percent lower.
Tata Motors Ltd fell 2.8 percent on worries about production at unit Jaguar Land Rover’s (JLR) plants from a threatened strike by DHL staff.
JLR and logistics firm DHL said on Monday that plans are in place to minimise the impact on production at the carmaker’s British plants from a threatened strike.
Bharti Airtel Ltd shares fell 0.8 percent after Zambia begun criminal proceedings against all the three mobile phone operators in the country including Bharti,accusing them of failing to meet minimum standards,its spokeswoman said on Monday.
ITC Ltd rose 1.2 percent,marking its fourth day of gains,after the company raised the price of its Gold Flake Regular Filter cigarettes.