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Sensex Below 16,000, Rupee Breaches 52 Mark

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[In an eight-day long losing streak on Monday, the BSE benchmark Sensex fell below the psychological 16000 level for the first time in six weeks, losing over 425 points on heavy foreign fund outflows amid depreciating rupee and weak global markets. The rupee  touched the 52 per dollar mark for the first time in 32-1/2 months on Monday as domestic equities weakened and oil importers bought dollars. The Bombay Stock Exchange 30-scrip index, Sensex, which had lost nearly 1,200 points in last seven straight sessions, plunged further by 425.41, or 2.60 per cent to 1,5946.10, the first dip below 16,000 after October 5. Similarly, the broad-based National Stock Exchange 50-scrip index Nifty fell below 4,800 -- down 127.45 points, or 2.60 per cent to 4,778.35. Metals, banking, realty, auto and IT sectors were hit hard as trading sentiment dampened on weak trend in Asia and lower opening in Europe on deepening euro zone debt crisis. Reliance Industries, with heaviest weight on the Sensex, fell 2.62 per cent and the second heaviest Infosys, by 2.86 per cent. The two stocks carry 20 per cent weight on Sensex. BHEL, Bajaj Auto, Bharti Airtel, DLF, HDFC Ltd, HDFC Bank, ICICI Bank, Jindal Steel, Larsen and Toubro, Mahindra and Mahindra, State Bank of India, Tata Consultancy Services and Tata Power were other major losers. Besides, refiners like Indian Oil, Hindustan Petroleum and Bharat Petroleum lost ground on concerns that the weak rupee will increase the cost of crude imports. Of 30 Sensex stocks, 28 declined while Maruti Suzuki and Sun Pharma bucked the trend and ended in positive zone. All the 13 sectoral indices ended in the red. The rupee slipped as the euro fell, oil importers clamoured for dollars and weak equities heightened concerns of foreign fund outflows. Global Markets Down Meanwhile, World stock markets fell as a change of government in debt-laden Spain and warnings from Asian officials of a sharp growth slowdown underlined the challenges facing the world economy. Benchmark crude fell below $97 per barrel. The dollar strengthened against the euro but slipped against the yen. European shares retreated in early trading. Britain's FTSE 100 slipped 1.2 per cent to 5,300.67. Germany's DAX dropped 1.5 per cent to 5,715.68 and France's CAC-40 slid 1.3 per cent to 2,956.66. The Nikkei 225 index in Tokyo fell 0.3 per cent to end at 8,348.27, its lowest closing since March 2009. Wall Street was set to lose ground, with Dow Jones industrial futures falling 0.9 per cent at 11,659 and S&P 500 futures down 1.2 per cent at 1,199.80. Market jitters were in evidence a day after Spain voted in a new government _ the third time in as many weeks that Europe's debt crisis has toppled an administration. Governments in financially troubled Greece and Italy have also fallen. Worst Performing Stock Index The benchmark, which is down more than a fifth this year, is among the world's worst performing stock index. Foreign portfolio investors have bought equities worth $571 million so far this year, sharply lower than $29 billion they invested in 2010. "A weak rupee is fuelling fears of a large-scale withdrawal from the (equity) market," said Deven Choksey, managing director at brokerage K.R. Choksey. "A weak rupee means we will continue to import inflation. This is impacting corporate earnings and weighing on overall sentiment," said D.D. Sharma, senior vice-president at brokerage Anand Rathi. A near double-digit inflation has forced India's central bank to raise interest rates 13 times since March 2010, slowing down Asia's third-largest economy. Top lender — State Bank of India, HDFC Bank and ICICI Bank — were down about 1.8 per cent each. India's software exporters, which derive majority of their revenues from overseas, were down 1.15%, on concerns that a lingering euro zone concerns could curtail revenue. "A weak currency wouldn't help IT exporters beyond a point as they hedge their position," said Ambareesh Baliga, chief operating officer at brokerage Way2Wealth Securities . Top software services firm TCS fell 1.87 per cent, while smaller rival Infosys was down 0.78 per cent. Sluggishness in pushing domestic policy reforms have also hit investor sentiment. Parliament will convene for its winter session on Tuesday with a long list of pending policy decisions, but analysts do not expect too many policy initiatives. (Agencies)