Sensex slides 298 pts to two-month lows;Jindal Steel tanks 15%

The BSE benchmark Sensex today sank by 298 points to close at nearly two-month lows as steep fall in rupee almost killed rate cut hopes, amid 15 per cent plunge in Jindal Steel due to fresh developments in the coal issue.
Tracking rupee which hit a new record low of 58.98 versus dollar intra-day, Sensex dropped by 320 points and Nifty breached 5,800-level at noon on panic selling. Consumer durables, metal, realty and banking sectors suffered.
While indices recovered a tad after rupee rebounded to 58.4 levels, a fresh spate of selling in last hour saw Sensex closing at 19,143, loss of 298.07 points, or 1.53 per cent. This is the lowest closing since 19,016.46 on April 18.

"With continued turmoil in currency markets, any chance that the RBI might reduce rates after looking at the inflation data, is out of the window, as RBI cannot afford to further lower the yield on bonds," said HDFC Securities in a note.
Nifty ended at 5,788.80, down 89.20 points or 1.52 per cent. MCX-SX flagship index SX-40 also closed 165.35 points, or 1.43 per cent lower at 11,367.34.
Selling was so strong that all 13 BSE sectoral indices closed with losses between 0.59 per cent and 6.36 per cent. Across market, 3 stocks fell for every scrip that gained, translating to over Rs 1 lakh crore loss in investor wealth.

"Rupee's sudden depreciation has led to some outflows and correction in the equity markets as well," said Lalit Thakkar, MD -Institution, Angel Broking.

Jindal Steel, which crashed by 24 per cent in early trade as Naveen Jindal and the company were named as accused in the fresh FIR filed by CBI in connection with the coal allocation scam, pared some losses to end Rs 226.35, down 15.18 per cent.
ICICI Bank, HDFC, HDFC Bank and SBI ended 1-4 per cent lower. Auto stocks - M&M, Tata Motors and Maruti - slid amid car sales falling for seventh month in May.

Weakness in global stocks was under pressure throughout the day. Disappointment over the Bank of Japan's failure to expand monetary stimulus for the country weighed on Asian markets, dealers said.