Markets whipsawed on Rupee's free-fall

Benchmark indices ended lower this Wednesday after rupee tumbled to an all-time low of 60 per US dollar raising fears over more outflows in the near term.

Foreign Institutional Investors have net sold Rs 105.50 billion in 11 consecutive trading sessions on dashed hopes of rate-cut after currency depreciated nearly 12 per cent in past 2 months.

Mirroring the concerns, the 30-share Sensex shed 77.03 points at 18,552.12 and the 50-share Nifty dropped 20.40 points at 5,588.70 levels.

Month-end dollar demand from importers resulted in the rupee touching a new all-time low on Wednesday against the dollar.

The rupee touched a low of Rs 60.62 breaching previous all-time intra-day low of Rs 59.98 hit last week. The currency was trading at 60.59 to a dollar versus Tuesday's close of 59.66/67.

Globally, the People’s Bank of China has provided financing to some financial institutions to stabilize interbank lending rates and will use short-term liquidity operations and existing loan-facility tools to ensure steady markets, according to a statement yesterday.

Asian stocks ended mixed with Nikkei falling 1% to 12,834, Singapore Straits Times gained 0.4% to 3,104, Hong Kong’s Hang Seng rose 2.4% to 20,338 while China’s Shanghai Composite index was down 0.4% at 1,951.

Meanwhile, German consumer confidence will rise to 6.8 next month from 6.5 in June, Nuremberg-based research company GfK SE said today. That would be the highest since September 2007.

In Europe, France’s CAC gained 1.5% to 3,705, Germany’s DAX added 1.3% to 7,912 and UK’s FTSE was up 1% at 6,160.

Back home, the key sectoral losers included autos, metals, banks, consumer durables, healthcare while power, FMCG rose on the BSE.

The gainers included counters such as TCS rising 2.8%, NTPC and GAIL were up 2% and 2.7% respectively, Hero MotoCorp rose 4%, ITC added 1% on the BSE.

The laggards were Bharti Airtel falling 5.7%, M&M was down 4.6%, Tata Motors fell 3%, Hindalco Industries fell 2.3% while Jindal Steel declined 2.8% on the BSE.

The key notable movers included counters such as NTPC that moved higher by 2% in late noon deals on NSE, on reports that the state-owned electric utilities company has agreed to sign fuel-supply agreements with Coal India.

Bharti Airtel dipped 5% on reports, the telecom ministry has approved penalty of Rs 650 crore on Bharti Airtel for violating roaming norms in 13 service areas between 2003 and 2005.

The broader markets ended lower with mid-caps and small-caps falling 0.4-0.6 per cent on the BSE.

The market breadth was negative. Out of 2,456 stocks traded so far, 1,361 stocks dropped while 952 advanced on the BSE.