Markets slip into red; weakness in rupee weigh

Equity markets have pared all their gains and the benchmark indices are currently trading lower by about a quarter percent. Though, the beaten down sectoral gauges of last session IT and technology have moved higher but the rate sensitive that were the top gainers are suffering sharp profit taking. Power sector too has given up its last session gains. On the global front, though the European markets made a bit hesitant start but have gathered momentum on speculation that China and the euro area will do more to bolster economic growth. On the domestic front it’s the continuous slide in the rupee that has led the sentiments lower for the market. The Indian currency is continuing to remain above the 55 per dollar mark.

The BSE Sensex is currently trading at 16,153.18, down by 30.08 points or 0.19% after trading in a range of 16,366.72 and 16,100.79 respectively. There were 13 stocks advancing against 17 declines on the index.

The broader indices too have given up; the BSE Mid cap index was down by 0.12% and Small cap index lost 0.03%.

IT up by 0.56%, TECk up by 0.45%, Oil & Gas up by 0.29%, Auto up by 0.22% and PSU up by 0.18% were the top gainers on BSE sectoral chart.

On the flip side, FMCG down by 0.77%, Power down by 0.54%, Realty down by 0.50%, CG down by 0.48% and Metal down by 0.28% were the laggards in the space.

Tata Motors up 2.45%, BHEL up by 1.94%, TCS up by 0.93%, Tata Steel up by 0.91% and Bharti Airtel up by 0.68% were the top gainers on the Sensex, while Tata Power down by 4.24%, Sterlite Inds down by 3.61%, Maruti Suzuki down by 2.63%, Sun Pharma down by 2.35% and Hindalco Inds down by 1.99% were the major losers in the index.

Meanwhile, the Reserve Bank of India (RBI) has taken and will continue to take steps to arrest the downfall in the rupee, stated Subir Gokarn, deputy governor of RBI. However Gokarn opined that ultimately the price of the rupee shall be determined by the capital inflows.

The Rupee fell to an all time low of 55.03 against the dollar on 21 May. The fall was essentially due to the high demand for the dollar from the oil companies. The widening current account deficit also contributed to fall.

The rupee that fell by 22% between August and December 2011 has dipped by 18% this year. Even though most currencies in South East Asia have performing badly, rupee has been one of the worst performers. 

The RBI on its part has not only dug into its reserves of $293 billion but has also announced various incentives to increase the inflow of the dollar. These include relaxing interest rates caps on non-resident deposits and asking exporters to convert half of their foreign currency earnings into rupee. Gokaran has also hinted at the possibility of the RBI buying bonds through open market operations (OMO) again this week.

The S&P CNX Nifty is currently trading at 4,897.95, lower by 8.10 points or 0.17% after trading in a range of 4,956.35 and 4,881.40 respectively. There were 21 stocks advancing against 27 declines on the index, while 2 remained unchanged.

The top gainers on the Nifty were Tata Motors up by 2.52%, SAIL up by 2.25%, BHEL up by 1.86%, Cairn up by 1.20% and HCL Tech up by 1.16%.

Tata Power down by 4.44%, Sesa Goa down by 3.30%, Sterlite Inds down by 3.01%, Sun Pharma down by 2.67%, and Hindalco down by 2.17% were the major losers on the index.

All the Asian markets were in green, Shanghai Composite gained 1.06%, Hang Seng gained by 0.62% KLSE Composite was up by 0.52%, Nikkei 225 surged by 1.10%, KOSPI Composite added 1.64%, Taiwan Weighted was higher by 1.15%, Jakarta Composite zoomed by 2.06% and Straits Times has added 1.26%.

The European markets traded in green, France’s CAC 40 surged 0.30%, Germany’s DAX added 0.55% while, United Kingdom’s FTSE was up by 0.65%.