The Hindu Business Line, August 18, 2009, Page 1
In sync rupee tumbles 71 paise, breaches 49-mark against dollar.
Our Bureau, Mumbai
Stock markets took a battering on Monday on the back of fears that the global economic recovery will be slower than expected even as poor monsoon continued to cast its shadow on investor sentiment.
The benchmark stock index Sensex slipped over four per cent or 626 points and fell below the 15,000-mark on sustained selling pressure. The index closed at 14,785, after touching an intra-day low of 14,740.
The broad-based Nifty too closed below the 4,400-level shedding 192 points.
Stockbrokers said the sharp fall in Chinese and other Asian markets triggered the 127-point opening loss for the Sensex.
FII net sellers
Foreign institutional investors were net sellers of equities worth Rs 1,226.5 crore. However, domestic institutions were net buyers of equities worth Rs 460 crore. According to marketmen, Australia-based FIIs were seen selling in the market.
Retail investors also picked up stocks taking advantage of the steep fall. They were net buyers of equities worth Rs 360 crore on the BSE. Proprietary traders (brokerages) net sold stocks worth Rs 180 crore on the BSE.
A Bank of America Merrill Lynch report on Monday indicated a 10-15 pet cent pull back in Indian equities led by drought-led growth cuts. This should result in near term earning downgrades in auto and consumer segments. Investors’ participation in the cash market was subdued. BSE’s turnover was Rs 4,956 crore (Rs 5,650 crore on Friday) and Rs 15,425 crore (Rs 16,421 crore) on the NSE.
According to market participants, negative economic data from several parts of the globe hurt investors’ sentiment badly. A survey by the University of Michigan showed lower than expected US consumer sentiment.
The growth in Japanese economy in the June quarter was also below expectations. “Indian markets fell following the sell-off in the global markets, especially the Chinese markets. Metals such as copper and zinc have been weak on the LME and metal stocks were trending weak in the Chinese markets,” said Mr Saurav Arora, Senior Vice-President, Jaypee Capital Services Ltd.
Hindalco, Tata Steel and Sterlite Industries fell by 6-7 per cent.
Rupee impact
The fall in equity market had its impact in the forex market too.
The rupee weakened sharply tracking other Asian currencies and the domestic equity markets.
The domestic currency opened at 48.55 and moved in a one-way downward direction to end at 48.95, 71 paise lower from Friday’s close of 48.24.
During the day, it touched a low of 49, a level last seen a month-ago.
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