The stock markets took a beating with the BSE Sensex today plunging below the psychological 16,000 barrier and the rupee plummeting along to historic low levels of 54.56 as deepening Eurozone crisis drove investors to shift capital away.
With the rupee sliding to record low levels,jittery foreign funds resorted to aggressive selling pulling down the key index below 16,000 level for the first time in a little more than 4 months.
Though it managed to close at 16,030.09–a drop of 298.16 points or 1.83 per cent– a whopping notional loss of Rs 77,000 crore for investors — in a session in which 6 out of 10 stocks fell across the counters.
Finance Minister Pranab Mukherjee attributed the market slide to Euro crisis and other international difficulties.
Referring to the crisis in eurozone and its impact on India,he told Rajya Sabha that government would resort to some sort of austerity measures whether people like it or not to convey a signal that it was responding to the situation.
His pep talk seems to have bolstered the sentiment as the Sensex regained nearly 50 points at the fag-end.
Market analysts,however,said besides global cues,sharp rupee depreciation for markets was a big concern.
According to Kishor P Ostwal,CMD,CNI Research,the market will continue to remain bearish if rupee falls further.
“If rupee bounces back,equity markets will also bounce back very sharply. Possibly,we can again see dead cat bounce tomorrow,” he said.
The domestic currency fell to an all-time low of 54.56 against the US dollar but later recovered marginally to end the session at 54.50,down by 70 paise.
No counter could escape the investor wrath as selling was across-the-board with all BSE sectoral indices closing with losses. Among the 30 Sensex stocks,28 counters logged losses.
Among Sensex stocks,Tata Motors was the biggest loser dropping 7.34 per cent on a 29 per cent drop in April vehicle sales of JLR.
“Tata Motors has significant sales contribution from Euro region and political turmoil in Europe is expected to adversely affect the company¿s performance,” said Sharmila Joshi,Head Equity,Fairwealth Securities.
Among sectors,BSE-Metal was the worst performing closing 2.68 per cent down,followed by BSE-Auto (2.59 pc),BSE-Consumer Durables (1.94 pc),BSE-Capital Goods (1.69 pc) and BSE-Bankex (1.65 pc).
The NSE broader 50-issue Nifty today plunged by 84.55 points or 1.71 per cent to below 4,900-mark to close at 4-month low of 4,858.25.
Sensex falls 280 pts,nears 16,000-mark
Earlier in the day,the BSE benchmark Sensex fell sharply by over 252 points in the opening trade today on fresh selling by foreign funds and retail investors,taking cues from weak Asian markets.
By 11 a.m. no sign of recovery was visible as the Sensex continued falling,shedding as much as 280 pts.
The 30-share barometer,which gained nearly 112 points in the previous sessions,fell by 252.07 points,or 1.54 per cent,to 16,076.18.
Stocks of auto,realty,banking,capital goods and metal sectors were under pressure,dragging down the Sensex.
Similarly,the wide-based National Stock Exchange Nifty index slid by 75.05 points,or 1.51 per cent,to 4,867.75 points.
Market experts said sentiments turned bearish largely on subdued trend on the other Asian bourses and profit-taking by speculators after previous sessions of gains.
In the Asian region,the Hong Kong’s Hang Seng index shed 2.46 per cent and the Japan’s Nikkei was trading 1.28 per cent down this morning. In the US,the Dow Jones Industrial Average ended 0.50 per cent lower in the previous session.
PreOpen: Sensex to watch
GLOBAL MARKETS ROUNDUP
* The near-month derivative contract for India’s NSE index at Singapore Exchange was down 1.4 per cent versus the MSCI Asia ex-Japan dropped 2.1 per cent. Global risk aversion will be key as Greece gears up for new elections.
* Asian shares fell on Wednesday after Greece failed to form a government,setting the stage for a June election that could raise the risk of Athens abandoning the euro and deepening the euro zone’s debt crisis.
*US stocks fell for the eighth day in the past 10 on Tuesday as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session.
KEY EVENTS TO WATCH
* Reserve Bank of India Governor Duvvuri Subbarao to address the Association of Finance Professionals of India (AFPI) organised by Dun & Bradstreet late in the evening.
* Axis Bank press conference. Agenda not known (0530 GMT)
* India’s money supply data. (1030 GMT)
INDIAN STOCKS TO WATCH
* Indian authorities are investigating top mobile phone carrier Bharti Airtel under its money laundering and foreign exchange rules in what a company source said was a probe related to the grant of airwaves a decade ago.
* Muthoot Finance Ltd’s net profit for the March-quarter grew 69 per cent to 2.35 billion rupees from 1.39 billion rupees a year ago.
* India’s 2012 monsoon rains are likely to hit the southern coast on time on June 1,the weather department said in a statement on Tuesday.
* India will continue to reduce its oil imports from Iran over time but did not discuss a target or time-frame for such reductions with US special envoy Carlos Pascual on Tuesday,a source familiar with the discussions said.
* Indian Oil Corp,the country’s biggest refiner,aims to expand refining capacity 41 percent by 2016/17 and use cheaper,heavy crude grades to boost profitability and offset revenues lost on domestic fuel sales,its refineries chief said.
* The government has brought in Boston Consulting Group to advise it on its review of production sharing contracts (PSCs) for exploration blocks.
* MMTC Jan-March net profit up six-fold to 894.7 million rupees from 153.5 million rupees a year ago.
* Tata Motors Ltd’s global vehicle sales growth in April was flat from a year earlier as continued demand for its luxury Jaguar Land Rover vehicles was offset by a fall in commercial vehicle sales.
* Speciality Restaurants Ltd has agreed to sell shares worth 264 million rupees ($5 million) to five cornerstone investors,it said in a regulatory filing on Tuesday,ahead of its $34 million initial public offering.
OTHER FACTORS TO WATCH
* Indian debt/FX factors to watch
* Greek instability weighs on euro,risk currencies
* Brent rise boosts premium to slumping US crude
* Foreign institutional investor flows
* For closing rates of Indian ADRs
Mutual Funds Check for top funds
Company INFO More on Infosys
Stocks More on Tata Motors