Growth worries, Re spook stocks
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).