Growth worries, Re spook stocks

The Political and Business Daily - - FRONT PAGE -

RBI's lower GDP fore­cast and ru­pee again fall­ing be­low the sen­si­tive 60-mark spooked stocks mar­kets on Tues­day plung­ing by 245 points to nearly three­week low of 19,348.34, ex­tend­ing losses for the fifth straight ses­sion.

RBI'S lower GDP fore­cast and ru­pee again fall­ing be­low the sen­si­tive 60mark spooked stocks mar­kets to­day with S&P BSE bench­mark Sen­sex plung­ing by 245 points to nearly three-week low of 19,348.34, ex­tend­ing losses for the fifth straight ses­sion.

RBI Gover­nor D Sub­barao ex­pect­edly kept key pol­icy rates un­changed, but mar­kets were jit­tery as the cen­tral bank low­ered the eco­nomic growth (GDP) pro­jec­tion for the cur­rent fis­cal to 5.5 per cent from 5.7 per cent.

Sell­ing was seen across­the-board as 12 out of 13 sec­toral in­dices closed down while only BSE-IT closed up fol­low­ing weak­ness in ru­pee. With al­most 60 per cent of stocks end­ing down, in­vestors be­came poorer by Rs 1 lakh crore.

The Sen­sex ini­tially moved in a nar­row range be­tween pos­i­tive and neg­a­tive ter­rain, but fell later af­ter the RBI pol­icy fil­tered in. Sen­sex closed sharply down by 244.94 points, or 1.25 per cent, at 19,348.34. In five days now ,it has plunged by 953.79 points or 4.70 per cent.

"The buy­ing in­ter­est seen af­ter the RBI pol­icy turned out to be a rather trap zone be­cause mar­kets dived down for rest of the day. The sell­ing was broad based with Oil & Gas firms get­ting badly im­pacted due to more than 1.5 per cent rise in USD/INR. RBI did not

an­nounce any ma­jor steps to con­trol ru­pee," said Nagji K Rita, CMD, In­ven­ture Growth & Se­cu­ri­ties.

Sim­i­larly, the broad­based National Stock Ex­change in­dex Nifty dipped be­low of cru­cial 5,800 level to end with a loss of 76.60 points, or 1.31 per cent, at 5,755.05. Also, SX40 in­dex, the flag­ship in­dex of MCX-SX, closed 139.03 points down, or 1.19 per cent, at 11,556.55.

Ru­pee turned sur­pris­ingly weak af­ter many days with the lo­cal cur­rency last trad­ing at 60.3 lev­els against the dol­lar, amid the apex bank that tight liq­uid­ity mea­sures would be to be rolled back in a cal­i­brated man­ner.

In 30-share Sen­sex pack, 22 stocks closed with losses led by Re­liance In­dus­tries, Hin­dalco In­dus­tries, GAIL In­dia, Bharti Air­tel, Ba­jaj Auto, ONGC, State Bank of In­dia, ICICI Bank, HDFC Bank, BHEL and Hin­dus­tan Unilever.

Kishor P Ost­wal, CMD, CNI Re­search said: "Mar­ket closed very weak as rates re­main un­changed. Ru­pee went past 60.50 in fu­tures. Mar­ket hav­ing closed be­low 200 day mov­ing aver­age now may be headed for fur­ther fall. Many stocks are at all time low which is mak­ing in­vestors ner­vous."

As many as 22 scrips out of the 30-share Sen­sex pack ended lower. Ma­jor losers from the Sen­sex were ONGC (5.64 pc), Hin­dalco Ind. (4.64 pc), Tata Mo­tors (3.94 pc), Bharti Air­tel (3.76 pc), Ba­jaj Auto (3.30 pc), Gail In­dia (3.26 pc), RIL (3.02 pc), Tata Steel (2.83 pc), NTPC (2.78 pc), BHEL (2.74 pc), Tata Power (2.33 pc), ITC (2.07 pc), HUL (2.03 pc), Dr Reddy's Lab (1.72 pc), Hero Mo­tocorp (1.42 pc), HDFC Bank (1.25 pc) and SBI (1.17 pc).

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