Sensex falls below 19,000 as market tumbles in early trade

Key benchmark indices tumbled in early trade on weak Asian stocks. The S&P BSE Sensex fell below the psychological 19,000 level as the rupee hit record low against the dollar. The Sensex was down 373.50 points or 1.94%, off close to 200 points from the day's high and up about 50 points from the day's low. The market breadth, indicating the overall health of the market, was weak. All the 13 sectoral indices on BSE were in the red. Metal stocks fell across the board after a survey showed further slowdown in China's manufacturing sector in June 2013.

Stocks fell across Asia after Federal Reserve Chairman Ben Bernanke said after a two day policy meeting on Wednesday, 19 June 2013, that the central bank may reduce bond purchases later this year should the US economy strengthen. Concerns about the health of the Chinese economy also weighed on sentiment after a survey showed further slowdown in China's manufacturing sector.

Data showing that foreign funds remained net sellers of Indian stocks on Wednesday, 19 June 2013, affected market sentiment adversely. Foreign institutional investors (FIIs) sold shares worth a net Rs 544.97 crore on Wednesday, 19 June 2013, as per provisional data from the stock exchanges.

The rupee hit record low against the dollar. The rupee was currently trading at 59.88, down from its 58.71/72 close on Wednesday, 19 June 2013. The Reserve Bank of India (RBI) on Monday, 17 June 2013, refrained from cutting its key policy rate further despite sluggish economic growth due to the recent steep slide in rupee against the dollar. The central bank after a monetary policy review said that the weakness in rupee could adversely impact inflation which has been slowing in the past few months. A weak rupee makes the cost of oil and other imported goods higher in rupee terms, adding to inflationary pressure.

At 9:30 IST, the S&P BSE Sensex was down 373.50 points or 1.94% to 18,872.20. The index tumbled 423.05 points at the day's low of 18,822.65 in early trade. The index fell 176.50 points at the day's high of 19,069.20 in opening trade.

The CNX Nifty was down 121 points or 2.08% to 5,701.25. The index hit a low of 5,686.60 in intraday trade. The index hit a high of 5,755 in intraday trade.

The market breadth, indicating the overall health of the market, was weak. On BSE, 689 shares fell and 174 shares rose. A total of 26 shares were unchanged.

Among the 30-share Sensex pack, 29 stocks fell and only one of them rose. Wipro rose 0.36% and was the lone gainer from the Sensex pack.

Metal stocks edged lower on concerns about the health of the Chinese economy after a survey showed further slowdown in China's manufacturing sector in June 2013. Hindalco Industries (down 3.41%), Sterlite Industries (down 2.64%), Tata Steel (down 2.48%) and Jindal Steel & Power (down 2.36%), edged lower. China is the world's largest consumer of copper and aluminum.

Bharti Infratel declined 2.04% as the stock turned ex-dividend today, 20 June 2013, for final dividend of Rs 3 per share for the year ended 31 March 2013.

Havells India shed 1.51% as the stock turned ex-dividend today, 20 June 2013, for dividend of Rs 7.50 per share for the year ended 31 March 2013.

Bank of India fell 4.73% as the stock turned ex-dividend today, 20 June 2013, for dividend of Rs 10 per share for the year ended 31 March 2013.

Central Bank of India dropped 3.38% as the stock turned ex-dividend today, 20 June 2013, for final dividend of Rs 2.50 per share for the year ended 31 March 2013.

Dena Bank tumbled 7.52% as the stock turned ex-dividend today, 20 June 2013, for dividend of Rs 4.70 per share for the year ended 31 March 2013.

Indian Overseas Bank dropped 5.1% as the stock turned ex-dividend today, 20 June 2013, for dividend of Rs 2 per share for the year ended 31 March 2013.

Union Bank of India fell 4.51% as the stock turned ex-dividend today, 20 June 2013, for dividend of Rs 8 per share for the year ended 31 March 2013.

Petronet LNG declined 3.17% as the stock turned ex-dividend today, 20 June 2013, for dividend of Rs 2.50 per share for the year ended 31 March 2013.

Asian stocks slumped on Thursday after Federal Reserve Chairman Ben Bernanke said the central bank may reduce bond purchases later this year should the US economy strengthen. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, Taiwan and South Korea fell by 1.19% to 2.83%.

Activity in China's vast manufacturing sector weakened further in June to a 9-month low as new orders faltered, a preliminary survey of purchasing managers showed on Thursday, reinforcing signs of tepid economic growth in the second quarter. The flash HSBC Purchasing Managers' Index fell to 48.3 in June from May's final reading of 49.2, drifting further away from the 50-point level demarcating expansion from contraction. It was the weakest level since September 2012.

US stocks fell sharply on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank may scale back its bond purchases this year, depending on the economic outlook.

Bernanke said yesterday the central bank may start dialing down its unprecedented bond-buying program this year and end it entirely in mid-2014 if the economy finally achieves the sustainable growth the Fed has sought since the recession ended in 2009. In its announcement, the Federal Reserve after a two day policy meeting on Wednesday said it would continue to purchase $85 billion in bond purchases each month, but noted that the outlook for the economy and the labor market has improved since the fall. The Federal Open Market Committee (FOMC) reiterated that it was ready to hike or cut the pace of its asset buys, depending on the labor market and inflation.

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