Sensex down over 200 points; Rupee at new low

Consumer Durables, Realty, Banks, Metal stocks rattled in early noon deals

Markets continue to tumble in early noon deals as selling pressure in financials stepped up after the rupee fell to a record low. Also, weakness in names like L&T, ONGC and ITC continued to weigh on the indices.

At 1130 hrs, the Sensex was down 212 points at 18,970 and the Nifty slipped 75 points to trade at 5,610.

Sell-off continued in the broader markets with the midcap index down nearly 2% and the small cap index was down 1% in line with the BSE benchmark index.

The government had taken many steps to contain the free fall of rupee in the past few days but has met with utter disappointment as the rupee has only continued to slide. Last week slumping to further low, the rupee tested new closing low of 61.10 versus the US dollar on Friday, which now stands overturned by Tuesday morning's low of 61.32.

Currently, rupee was down to the levels of 61.44, showing the month-old cash tightening steps from the RBI have so far failed to prop up the currency.

Weak Macros

Continuing the trail of weak macro numbers, the HSBC survey announced that business activity across emerging economies contracted for the first time in over four years in July, driven mainly by a drop in manufacturing while services activity stagnated, a survey showed on Tuesday.

It highlighted the growing divergence between activity in the developed world and emerging economies and cast doubt on prospects for a sustained global economic recovery from the financial crisis.

The composite HSBC Emerging Markets index for services and manufacturing fell to 49.4 in July from 50.6 in June and below the 50 mark that separates growth from contraction. It was the first sub-50 reading since April 2009.

The HSBC survey collects data from purchasing managers at about 7,500 firms in 16 emerging markets.

Asian Markets

Asian shares too had a bad day as the dollar extended losses against the yen into a third day on Tuesday as markets questioned their expectations the U.S. Federal Reserve would start scaling back its stimulus as soon as next month, putting Japanese shares on the defensive.

Asian shares outside of Japan hit a two-week low and headed for their first loss in four days, as disappointing first-half earnings from HSBC dragged Hong Kong's Hang Seng Index sharply lower.

Asian shares measured by MSCI Asia-Pacific ex-Japan fell 0.8%, to be headed for their biggest one-day fall in four weeks.

Hong Kong's Hang Seng underperformed the region, trading down 1.7% on the back of a 4.6% fall in index heavyweight HSBC after the bank posted lower than expected earnings.

In Tokyo, the Nikkei share average shed 1.4% on the back of the firmer yen, which lowers income for exporters such as carmakers.

Stocks & Sectors

Back home, all the sectoral indices continue to trade in the negative, except the IT index, recovering from the earlier lows of the morning deals.

Consumer Durables, Realty, Bankex, Metal and Capital Goods indices gave off 2-4% and were the top sectoral losers.

The only gainers among the Sensex-30 were Hero MotoCorp, Wipro, TCS and NTPC which advanced 0.4-2%.

Among the top losers were metal names Sterlite and Tata Steel down 3.6-5.5%.

HDFC Bank, BHEL, Tata Power, Bajaj Auto, L&T, ONGC and Cipla down 2-3.5% were the other notable losers.

The market breadth was very negative.1, 262 stocks declined while only 503 stocks advanced on the BSE.