Sensex tanks 405 pts on weak R, global manufacturing slump
The benchmark BSE Sensex on Thursday plunged to a two-week low of 17,196.47, down 405 points or 2.3%, as foreign investors sold stocks in the backdrop of a weaker rupee.business Updated: Mar 22, 2012 23:11 IST
The benchmark BSE Sensex on Thursday plunged to a two-week low of 17,196.47, down 405 points or 2.3%, as foreign investors sold stocks in the backdrop of a weaker rupee, while reports of a coal pricing scandal after a CAG (Comptroller and Auditor General of India) report that talked of huge losses to the government hurt buying sentiment. Negative growth signals from Germany and France compounded the mood.
“The trigger for the fall was an unexpected decline in manufacturing activity in Germany and France, which sparked fears that foreign investors would head for exits,” said Sudip Bandyopadhyay, managing director and chief executive officer, Destimoney Securities.
The index was trading in a narrow range till 2 pm and selling accelerated after unexpected sharp falls in manufacturing activity (reflected by the purchasing managers index or PMI) in Germany and France added to data earlier that also showed a drop in the HSBC flash manufacturing index for China.
The news about manufacturing contracting in the euro zone hit European markets. France’s CAC40 was trading lower 1.5%, Germany’s DAX was down 1.3% while UK’s FTSE 100 was down at 1%.
On the domestic side, the rupee hit a more than 2-month low of 51.3 and ended at 51.2 to the US dollar, compared with its previous close of 50.7, after suspected dollar sales by the RBI.