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Market down in dumps as rupee hits new low; Nifty sinks 3%

Last Updated: Tuesday, August 27, 2013 - 21:23

Mumbai: Shares got a severe thrashing on panic sell-off triggered by further slide in already bruised rupee and mounting fears of a prolonged and painful economic slump amid sovereign downgrade risk as the key NSE index Tuesday nosedived by nearly 200 points to settle at multi-month lows.

Frenzied selling in heavyweights across the sectors by foreign institutional investors and domestic players put immense pressure on the benchmark Nifty, which crumbled by a whopping 189.05 points, or 3.45 percent, to end at 5,287.45 on the National Stock Exchange (NSE).

The domestic unit fell below 66-mark to the dollar despite Government's slew of measures, rattling investors.

Forex and capital market participants are worried about the wide swings in rupee, which will have an adverse impact on business conditions and investment, jeopardising India's long-term growth prospects, analysts said.

The market opened down in the backdrop of sliding rupee and remained under selling pressure ahead of F&O contract expiry later this week. Sentiment got spooked in afternoon following the further fall in rupee, which hit fresh life-time low against dollar, triggering panic on bourses.

Markets are likely to see further downside as GDP data for the April-June quarter is expected on Friday and investors are cautious in the midst of deepening slowdown, they said.

Disappointing macro-economic indicators, falling rupee and bleak chances of economic recovery are making it difficult for overseas players to stay invested in India markets for longer term, traders said.

Today's sell-off was not India-specific as currencies and equities in emerging markets too came under selling on heightened fears over a possible US intervention in Syria amid uncertainty over Fed tapering its stimulus measures.

The selling was so ferocious that most of the sectoral indices ended with huge losses. Financial stocks bore the brunt of the sell-off followed by FMCG, energy, healthcare, auto, metal and infra counters.

IDFC, BHEL, IndusInd Bank, JP Associates, HDFC Bank, HDFC, Axis Bank, RInfra, Ranbaxy and ACC were the key losers. Few gainers included Infosys, Dr Reddy's and HCL Tech.

Turnover in the cash segment jumped to Rs 12,077.51 crore from Rs 10,713.14 crore yesterday. A total of 6,603.60 lakh shares changed hands in 65,84,636 trades. The market capitalisation stood at Rs 56,97,119 crore.


First Published: Tuesday, August 27, 2013 - 21:23
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