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Markets edged lower with benchmark index, Sensex slumping nearly 470 points in late-morning session on fear that the roll-back of US stimulus could spark selling pressure by the overseas investors in the equity space.
Risk appetite further dampened after government imposed new restrictions on foreign exchange outflows and gold imports on Wednesday in a new attempt to prop up the rupee, were also seen hampering an already slowing economy.
At 11:30AM, 30-share Sensex tanked 478 points to trade at 18,888 and the 50-share Nifty shed 162 points at 5,580 levels.
The Rupee, Asia’s worst currency so far this year, fell to an all-time low of 62 per USD. The partially convertible currency traded at 61.86 against the dollar in late trades against the Wednesday’s close of 61.44 at the Interbank Foreign Exchange market.
Globally, Asian stocks dropped after an unexpected drop in U.S. jobless claims fueled speculation the Federal Reserve will cut stimulus.
Japan’s Nikkei was down 0.8% to 13,635, Singapore’s Straits Times fell 0.8 % to 3,195, China’s Shanghai Composite index was up 0.8% at 2,099 while Hong Kong’s Hang Seng shed 0.55 to 22,433 today.
Claims for jobless benefits unexpectedly dropped last week to the lowest level in almost six years, signalling the US job market continues to mend.
The number of applications for unemployment insurance payments declined by 15,000 to 320,000 in the week ended August 10, the fewest since October 2007, from a revised 335,000, a US Labor Department report showed in Washington on Thursday.
Domestically, all the key sectoral indices dropped with realty, consumer durable, power, banks, capital goods sectors leading the drop on the BSE.
The gainers included counters such as Wipro rising 1.2%, Hero MotoCorp gaining 1% while Dr Reddy’s was tad up by 0.02% on the BSE.
The laggards were HDFC dropping 5.6%, ICICI Bank and SBI shed 4% each, Maruto Suzuki declined 5% on the BSE.
The key notable movers included counters such as Jain Irrigation Systems that has tanked over 10% at Rs 48.50 after the company said its consolidated net loss increased by 22% at Rs 60 crore for the quarter ended June 30, 2013 (Q1), due to higher raw material expenses. The micro irrigation company had loss of Rs 49 crore in year ago quarter.
Mahindra and Mahindra Financial Services has rallied 5% to Rs 267 on reports that Mahindra Group financial company has been added in the MSCI emerging markets and India indexes effective September 2.
The broader markets traded lower with mid-caps and small-caps falling 1.3-1.9 per cent on the BSE.
The market breadth was negative. Out of 1,939 stocks traded, 1,278 stocks declined while 560 stocks advanced on the BSE.
