Sensex drops 171 pts as rupee plunges to record low vs dollar

Mumbai, PTI | Updated : 08 July 2013, 05:27 PM

Fag-end buying triggered by strong European cues helped benchmark S&P BSE Sensex on Monday partially recover from early losses to end 171 pts lower at 19,324.77 after positive US jobs data dragged rupee to record low.

The rupee breached the 61-level and fell to a record low of 61.21 per dollar in early trade as stronger-than-expected US jobs data fuelled concern that the US Federal Reserve will slow the pace of its monetary stimulus later this year.

Sensex-based counters ONGC, HDFC, Tata Motors, GAIL, Coal India, NTPC, ICICI Bank, RIL, TCS, HDFC Bank, M&M and SBI registered sharp-to-moderate losses. FMCG and IT shares closed with gains on good buying support. Banking stocks were hit as a weak rupee fanned worries that RBI may hold rates for now.

The 30-share Sensex resumed lower at 19,418.98 and dropped to a low of 19,185.92 before recovering some ground to end at 19,324.77, a decline of 171.05 points or 0.88 per cent.

The NSE 50-share index CNX Nifty fell by 56.35 points, or 0.96 per cent, to 5,811.55.  Also, SX40 index, the flagship index of MCX-SX, closed 90.44 points lower at 11,535.44.

"Nifty opened on a weak note, taking cues from weaker Asian markets, as uncertainties over the US Federal Reserve continuing the stimulus program till year end were revived after positive US jobs data," said Nidhi Saraswat, Senior Research Analyst at Bonanza Portfolio Limited. "The weakness in the rupee where it touched its record lows, breaching 61 level, also dampened the market sentiment."

Asian stocks ended lower amid concerns that a credit squeeze in China will curb growth. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan shed 0.45 per cent to 2.44 per cent.

However, European markets gained in early trade as investors waited for Alcoa Inc to kick off the US earnings season later in the day. Key indices in UK, France and Germany rose by 0.45 per cent to 2.23 per cent.

First Published: Monday, July 08, 2013 09:49 AM

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