Mumbai: Stock markets Wednesday mirrored slide in rupee with Sensex surrendering gains in last hour of trade to end 77 points down at 18,552.12 as the currency breaching the 60-mark against dollar renewed concerns over FII outflows.
With rupee hitting lifetime low of 60.62 in late afternoon deals, domestic stocks led by auto, metal, consumer durables and banks were rattled, despite firm European cues.
The Bombay Stock Exchange 30-share barometer resumed higher and moved in a narrow range till late afternoon before succumbing to sell-off at the fag-end to settle at 18,552.12, a fall of 77.03 points or 0.41 percent.
Out of the 30-scrip Sensex, 18 ended lower led by Bharti Airtel falling 5.74 percent on Rs 650-crore fine for allegedly violating roaming norms. Mahindra and Mahindra closed down by 4.63 percent.
Bucking the general weak tend, stocks of software exporters ended with gains on hopes of better earnings on account of a strong dollar. TCS rose 2.84 percent, Wipro gained nearly 1 percent and Infosys rose 0.8 percent.
The broader 50-issue CNX Nifty of the NSE also dropped by 20.40 points, or 0.36 percent, to end below the key 5600-mark at 5,588.70. Similarly, SX40 index, the flagship index of MCX-SX, closed 49.23 points, or 0.44 percent down at 11048.71.
Traders were also cautious ahead of expiry of derivatives contract tomorrow. Heavy continued capital outflows in last few days has kept markets under pressure with FIIs pulling out over USD 6 billion from stocks and debt in June so far.
"The strong rise in USD/INR rates caused trouble for equity markets. Concerns over FII outflows have increased," said Nagji K Rita, CMD, Inventure Growth & Securities.
Rupee, which was trading in 59.8 levels till 1400 hours, was hit hard by dollar demand and slumped to record low.
The market was under pressure since June 20 when the US Federal Reserve said it may taper of QE3, believing that the economy is on a sound growth footing.
Globally, Asian stocks closed mixed while European indices were last trading with gains.
Key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan closed up while China and Japan ended down. In Europe, France's CAC was up by 1.44 percent, Germany's DAX by 1.26 percent and the UK's FTSE by 0.87 percent.
Meanwhile, Foreign Institutional Investors (FIIs) remained net sellers and offloaded Indian shares worth a net Rs 1,285.86 crore yesterday, as per provisional data bourses.
Kishor P Ostwal, CMD, CNI Research Ltd. Said, "FIIs have pulled out big money and it will be good if they bring back money after FDI cap is raised. In any case, Nifty has fallen steeply in June hence reversal is on cards..."
18 scrips out of the 30-share Sensex pack ended lower while 12 finished higher. Major losers from the Sensex pack were Bharti Airtel (5.74 percent), M&M (4.63 percent), Tata Motors (3.02 percent), Hindalco Ind (2.32 percent), Coal India (1.72 percent), HDFC Bank (1.67 percent) and L&T (1.01 percent).
However, Hero Motocorp firmed up by 3.89 percent, followed by TCS (2.84 percent), Gail India (2.73 percent) and NTPC (2.13 percent) among others.
A weak rupee cast shadow on the local equities market.
Amar Ambani, Head of Research, IIFL said: "Concerns of scale back in the Fed's bond purchase program on strong US economic data led to a fall in the Indian rupee."
Among the sectoral indices, S&P BSE-Auto dropped by 1.79 percent, followed by S&P BSE-Metal (1.31 percent), S&P BSE-CD (1.12 percent), S&P BSE-HC (1.12 percent) and S&P BSE-Bankex (1.03 percent). However, S&P BSE-IT rose by 1.69 percent, followed by S&P BSE-Power (0.93 percent) and S&P BSE-FMCG (0.66 percent).
"Continued weakness in rupee and FIIs selling in equities is creating negative mood in the market as investors are apparently selling on every rally. Without any concrete positive trigger, these factors can overshadow sentiment and trigger further selling, if Nifty goes below 5550 level," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Total market breadth remained negative as 1,360 stocks ended down while 952 stocks finished up. The total turnover dropped to Rs 1,490.82 crore from Rs 1,929.66 crore yesterday.