Double blow: Rupee falls below 61/dollar; Markets down

Markets open lower tracking weakness in Asian while the depreciating rupee also weighed on market sentiment

Markets opened lower on Monday tracking weakness in Asian while the depreciating rupee also weighed on the market sentiments.

The rupee fell to a record as an emerging markets selloff after strong US jobs data laid bare the currency's vulnerability and dependence on capital inflows to fund its record current account deficit.

The rupee was at 61.09, breaching the previous low of 60.76 hit on June 26. It had closed at 60.225/235 on Friday.

Bond yields also jumped on fears that foreign investors would continue to sell rupee debt. The 10-year yield rose as much as 13 basis points to 7.63 pct from its previous close.

By 9:30, the Sensex was lower by 236 points at 19,259 mark and the Nifty dropped by 76 points at 5,792 levels.

Japan's Nikkei share average pared gains from an early push to a fresh 5-1/2 week high on Monday morning, as sharp losses in Chinese equities tempered optimism stemming from strong US jobs and a weaker yen.  

 The benchmark Nikkei advanced 0.1% to 14,322.22 in midmorning trade, after rising as high as 14,497.65, a level not seen since May 29, on the back of upbeat US jobs data suggesting the world's largest economy was on a solid footing.  Other Asian markets such as Hang Seng, Straits Times and Shanghai Composite were also trading lower.

Japanese bank lending marked its biggest annual increase in four years in June, suggesting the central bank's aggressive monetary stimulus and brightening economic prospects are spurring fund demand for fresh investment.  

According to technical experts, In the near term, 5,900 remains a major hurdle for the index, above which the index can spurt to 5,925-5,960. On the downside, the index can drift back to the expected trading band around 5,750. On Monday, the Nifty may seek support around 5,850-5,840, while face resistance around 5,885-5,895.

On the sectoral indices, BSE Realty and Metal indices have plunged by nearly 2% followed by counters like Oil & Gas, PSU, Auto, Banks, Power, Consumer Durable and Capital Goods, all declining by 1% each. However, BSE IT index has gained by nearly 1%.

The main losers on the Sensex at this hour include Tata Motors, Hindalco, JSPL, ICICI Bank, JSPL, Sterlite, Bharti Airtel and ONGC, all falling down between 2-3%.

On the gaining side, Infosys, Wipro, TCS and Hero Moto have gained between 0.1-1%.

Among other shares, Wockhardt has dipped as much as 20% to Rs 732, also its 52-week low on BSE in early morning deals, on reports that UK medicines and Healthcare Products Regulatory Agency (MHRA), has imposed an alert on Wockhardt's export-oriented unit in Aurangabad.

FreseniusKabi Oncology is trading lower by 3% at Rs 102 after the pharmaceutical company said it has received a warning letter from the US health regulator asking for certain other information and implementation of more corrective and preventive measures regarding GMP non- conformities.

In the broader market, the BSE Mid-cap index was down 0.9% and the Small-cap index was down 0.4%.

The market breadth in BSE remains weak with 560 shares declining and 267 shares advancing.