Business Standard

Sensex slumps below 17k more pain seen

Key indices break crucial technical support levels, close below 200-DMAs

BS Reporters  |  Mumbai 

SENSEX INTRA-DAY

Shares tumbled on Friday after a junior minister said the country was reviewing its tax treaty with Mauritius, sparking fears of outflows from foreign investors. A falling rupee and weak global markets added to the negative sentiments.

The Bombay Stock Exchange (BSE) benchmark, Sensex, fell 1.87 per cent, or 320.11 points, to 16,831.08. This was the lowest close for the 30-stock index since January 23.

At the National Stock Exchange (NSE), the 50-stock index dropped 1.96 per cent, or 101.55 points, to 5,086.85.

India is considering a review of the Double Taxation Avoidance Treaty with Mauritius to raise revenues, minister of state for finance S S Palanimanickam said in Parliament in reply to a question.

The minister said 39.5 per cent of total foreign direct investment (FII) flows into India between April 2000 and February 2012 have been channelled through Mauritius. The Indian rupee fell six paise to close at 53.47 against the dollar, after hitting an intra-day low of 53.91 in early trade.

“There were concerns regarding the taxability of foreign investors, the depreciation of the rupee in the past few days and the weak global markets,” said Dipen Shah, head of fundamental research, Kotak Securities. Technically too, markets appear on sticky ground after Friday’s fall.

Both the Sensex and Nifty have closed below their 200-day moving averages (DMAs) of 16,968.04 and 5,117.32, respectively.

“If Nifty continues to remain below its 200-DMA, it will not be good for the markets,” said Deepak Mohoni, founder of Trendwatch (India). “Next week is quite crucial. If the Nifty remains below 5,100, there will be a continuation of the downward movement.”

Among the major losers in the Sensex, BHEL lost 4.93 per cent at Rs 214.1 and Hero MotoCorp declined 4.42 per cent to Rs 1,980.85. Except healthcare, all sectoral indices ended in the red on the BSE. Capital Goods and lost three per cent each. At 6:45 pm, key indices in the UK, France and Germany were trading down one per cent each. Futures on major US indices were also indicating a weak opening.
 

2012: REPEAT PERFORMANCE?
Instances where the Sensex went below 200-DMA and remained there for more than 30 sessions since 2000
Date

Performance post-breaking 200-DMA (In %)

Sensex Next 7
sessions
Next 30
sessions
Maximum
fall*
No of
sessions below
200-DMA
17-04-2000 4,880.71 -4.1 -9.2 -26.4 196
02-03-2001 4,095.16 -9.0 -16.0 -36.5 188
15-07-2002 3,278.71 -5.2 -5.5 -13.6 94
09-04-2003 3,141.25 -5.0 -1.4 -6.9 33
14-05-2004 5,069.87 0.6 -7.1 -11.1 87
03-03-2008 16,677.88 -7.9 0.4 -51.1 274
27-01-2011 18,684.43 -3.5 -1.9 -6.5 42
29-04-2011 19,135.96 -3.3 -4.5 -20.7 190
Date is the day when Sensex closed below it 200-DMA; * Reflects the decline in Sensex based on the lowest closing point touched during its down-trend post breaking 200-DMA

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Sensex slumps below 17k more pain seen

Key indices break crucial technical support levels, close below 200-DMAs

Shares tumbled on Friday after a junior minister said the country was reviewing its tax treaty with Mauritius, sparking fears of outflows from foreign investors. A falling rupee and weak global markets added to the negative sentiments.

Shares tumbled on Friday after a junior minister said the country was reviewing its tax treaty with Mauritius, sparking fears of outflows from foreign investors. A falling rupee and weak global markets added to the negative sentiments.

The Bombay Stock Exchange (BSE) benchmark, Sensex, fell 1.87 per cent, or 320.11 points, to 16,831.08. This was the lowest close for the 30-stock index since January 23.

At the National Stock Exchange (NSE), the 50-stock index dropped 1.96 per cent, or 101.55 points, to 5,086.85.

India is considering a review of the Double Taxation Avoidance Treaty with Mauritius to raise revenues, minister of state for finance S S Palanimanickam said in Parliament in reply to a question.

The minister said 39.5 per cent of total foreign direct investment (FII) flows into India between April 2000 and February 2012 have been channelled through Mauritius. The Indian rupee fell six paise to close at 53.47 against the dollar, after hitting an intra-day low of 53.91 in early trade.

“There were concerns regarding the taxability of foreign investors, the depreciation of the rupee in the past few days and the weak global markets,” said Dipen Shah, head of fundamental research, Kotak Securities. Technically too, markets appear on sticky ground after Friday’s fall.

Both the Sensex and Nifty have closed below their 200-day moving averages (DMAs) of 16,968.04 and 5,117.32, respectively.

“If Nifty continues to remain below its 200-DMA, it will not be good for the markets,” said Deepak Mohoni, founder of Trendwatch (India). “Next week is quite crucial. If the Nifty remains below 5,100, there will be a continuation of the downward movement.”

Among the major losers in the Sensex, BHEL lost 4.93 per cent at Rs 214.1 and Hero MotoCorp declined 4.42 per cent to Rs 1,980.85. Except healthcare, all sectoral indices ended in the red on the BSE. Capital Goods and lost three per cent each. At 6:45 pm, key indices in the UK, France and Germany were trading down one per cent each. Futures on major US indices were also indicating a weak opening.
 

2012: REPEAT PERFORMANCE?
Instances where the Sensex went below 200-DMA and remained there for more than 30 sessions since 2000
Date

Performance post-breaking 200-DMA (In %)

Sensex Next 7
sessions
Next 30
sessions
Maximum
fall*
No of
sessions below
200-DMA
17-04-2000 4,880.71 -4.1 -9.2 -26.4 196
02-03-2001 4,095.16 -9.0 -16.0 -36.5 188
15-07-2002 3,278.71 -5.2 -5.5 -13.6 94
09-04-2003 3,141.25 -5.0 -1.4 -6.9 33
14-05-2004 5,069.87 0.6 -7.1 -11.1 87
03-03-2008 16,677.88 -7.9 0.4 -51.1 274
27-01-2011 18,684.43 -3.5 -1.9 -6.5 42
29-04-2011 19,135.96 -3.3 -4.5 -20.7 190
Date is the day when Sensex closed below it 200-DMA; * Reflects the decline in Sensex based on the lowest closing point touched during its down-trend post breaking 200-DMA

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