Markets rattled by record-low Rupee, outflows

Markets continued to trade lower in the afternoon session this Monday as overseas investors sold away shares in the emerging markets and shifted stance to US after robust jobs data.

Risk appetite was also hurt amid lingering fear over tapering of US Federal Reserve’s bond-buying plans on back of growth recovery in world’s biggest economy.

At 2:15PM, the 30-share Sensex dropped 208 points at 19,287 and the 50-share Nifty declined 68 points at 5,800 levels.

Hopes of growth recovery in US gained prominence after non-farm payroll data showed 195,000 jobs were created last month, better than the 165,000 expected.

Meanwhile, the rupee fell to a record low on Monday, forcing the RBI to come to its defense, while bond yields surged, highlighting the vulnerability of a country dependant on capital inflows to fund its big current account deficit.

The currency is currently trading at Rs 60.96 after earlier hitting a record low of 61.21.

Globally, Nikkei dropped 1.4% to 14,109 , Singapore Straits Times rose 0.3% to 3,160, China’s Shanghai Composite index was down 2.5% at 1,958 while Hong Kong’s Hang Seng shed 1.3% to 20,582 today.

European markets traded firm. France’s CAC gained 1.1% to 3,795, Germany’s DAX gained 1.3% to 7,908 while UK’S FTSE rose 1% to 6,440.

Back home, FMCG, IT, Healthcare index gained while PSU, realty, oil and gas, bankex sector dropped on the BSE.

The key gainers included counters such as Wipro rising 1.55, Sun Pharma gained 0.95, Infosys added 0.8%, Dr Reddy’s Lab was up 0.6% on the BSE.

The laggards included names like ONGC falling 3%, Tata Motors declined 2.8%, HDFC shed 2.9%, GAIL was down 2.6% on the BSE.

The key notable movers included counters such as Bharti Airtel that has moved higher 4% at Rs 308, bouncing back over 6% from intra-day’s low, after the telecom services provider said it has reduced debt of over Rs 6,700 crore, which will result in an improvement in the capital structure and balance sheet leverage for the company.

Reliance Communications (RCom) has surged nearly 9% to Rs 148 in otherwise weak market after the company said that its board of directors had given in-principle approval to demerger of the company’s real estate assets into a separate company to lower debt.

The broader markets traded lower with mid-caps and small-caps shedding 0.3-0.5 per cent on the BSE.

The market breadth was negative. Out of 2,229 stocks traded so far, 1,253 stocks declined while 875 advanced on the BSE.