Stocks plunge on weak rupee, India out of trillion dollar club
Stung by the rupee hitting historic low, stock markets on Tuesday collapsed on all-round selling with the S&P BSE Sensex nosediving by 449.22 points to end below the 19,000-mark, edging India out of the trillion dollar club.business Updated: Aug 06, 2013 18:13 IST
Stung by the rupee hitting historic low, stock markets on Tuesday collapsed on all-round selling with the S&P BSE Sensex nosediving by 449.22 points to end below the 19,000-mark, edging India out of the trillion dollar club.
Sentiment was extremely poor on Dalal Street as the rupee plunged to record low of 61.80 against the US dollar, stoking fears of a higher current account gap as import costs surge.
The Bombay Stock Exchange 30-share barometer resumed weak and continued its downslide to end at 18,733.04, a steep fall of 449.22 points or 2.34 %. In the last ten trading sessions, Sensex has fallen in nine days while yesterday has managed to settle in positive terrain.
After today's plunge and the rupee's decline, India's market capitalisation stood at Rs 60.18 lakh crore, which translates to $989 billion at exchange rate of 60.8 versus the dollar. The rupee retreated from record lows to trade at 60.8 levels at 1710 hours.
Dipen Shah, Head of PCG Research, Kotak Securities said: "Markets ended sharply lower on the back of continuing concerns about the rupee and some disappointing results. The rupee traded at a new low and that caused concerns in market."
Across-the-board selling was seen as all 13 sectoral indices closed in the red between 0.40 % and 5.62 %, with consumer durable, realty, banking, metal, power, refinery, PSU, capital goods and FMCG dragging markets down.
An estimated Rs 5,600 crore payment crisis continued to overhelm National Spot Exchange Ltd, which raised concerns that problems may spill over to stock markets, brokers said.
The Nifty index on the National Stock Exchange tumbled 143.15 points, or 2.52 %, to 5,542.25, led by stocks of consumer durables, metals, banks and other interest-rate sensitive sectors. SX40 index, the flagship index of MCX-SX, closed at 11,125.38, down 303.34 points, or 2.65 %.
Globally, Asian stocks ended mixed as stronger growth in American service industries fuelled speculation that the US Federal Reserve will soon be able to reduce economic stimulus.