Sensex tracks global cues; down over 400 pts
Indian markets Friday went on a loosing spree as fresh concerns over global economic recovery emerged.
Mumbai: The BSE Sensex fell more than 2 percent on Friday afternoon, as Europe`s sovereign debt, indications of weak US jobs data and a crash in commodity and energy prices raised fresh concerns over global economic recovery.
The domestic markets have also taken the brunt of selling by foreign funds, which had earlier invested in emerging markets after borrowing in cheaper dollars.
By 15.09 pm, the 50-share BSE Index was down by 405.27 points, to 15,819.68 points - its lowest in three months, with only one component gaining.
Across-the-board selling was witnessed. Among the index stocks, heavyweight Reliance Industries led the losers and was down 2.4 percent at 994.60 rupees.
Bank stocks such as private lender ICICI Bank and State Bank of India (SBI) were also among the top losers. ICICI Bank was down 3.8 percent at 797.75 rupees, while larger rival SBI was down 3.1 percent at 1,888 rupees.
Among tech stocks, software bellwether Infosys Technologies was down 2.76 percent at 2,356.40 rupees, while larger rival Tata Consultancy fell 2.9 percent to 720.60 rupees.
Drug maker Ranbaxy Laboratories was down 5.23 percent at 404 rupees after a newspaper reported that the US drug regulator asked it to immediately assess whether its plants making drugs for the US market met standards.
"What we are seeing is dollar-carry-trade unwinding by foreign investors," said Neeraj Dewan, director, Quantum Securities.
"They borrowed when the dollar was cheap and now that the dollar is recovering, they are unwinding," he added.
The US dollar has surged after investor anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the euro and growth-linked currencies such as the Australian dollar.
"It’s a fall-out of that," said Naresh Kumar Garg, Chief Investment Officer at Sahara Mutual Fund.
He said rising inflation in India was also a worrying factor, especially food prices and how the government would tackle it.
Dewan said that the current trend of buying on dips and selling on slight rises in the domestic market would continue to determine market trend for the next week or two.
"There are some stocks which are still overvalued and we will continue to see selling there," he said.
In the broader market, losers led gainers 1,235 to 74 on a moderate volume of 370 million shares.
The 50-share NSE Index was trading down 2.61 percent at 4,718.90 points.